About The World Economic Outlook

Context:

In its January update of the World Economic Outlook (WEO) report, the IMF has marginally improved the forecast for global growth in 2023 — a relief, given the fears of a global recession in 2023. The turnaround reflects “positive surprises and greater-than-expected resilience in numerous economies”.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

1. Highlights of the latest report
2. World Economic Outlook
3. About International Monetary Fund (IMF)

Highlights of the latest report:

• The growth is likely to continue being weak, but stable, at 3.2% both in the next two years, that is, 2024 and 2025.
• For India, the IMF kept its estimate of gross domestic product growth at 7% for 2024, followed by 6.5 percent next year. However, it attributed the moderation in growth from last year to the exhaustion of “pent-up demand accumulated during the pandemic.”.
• The world’s largest economy, the United States is already indicated to grow at 2.8% in 2024 and 2.2% in 2025. The IMF expects China’s economy, the world’s second-largest economy, to grow at 4.8% in 2024 and 4.5% in 2025.
• The overall forecast of the International Monetary Fund on emerging markets and developing economies remained stable in the most recent outlook for the next two years, staying within 4.2 percent, steadying at 3.9 percent by 2029.

World Economic Outlook

• It is a survey by the IMF that is usually published twice a year in the months of April and October.
• It analyzes and predicts global economic developments during the near and medium term.
• The IMF releases the WEO twice every year, in April and October, apart from updating it twice — in January and July.

About International Monetary Fund (IMF)

• The International Monetary Fund (IMF) is an international organization headquartered in Washington, D.C.
• It consists of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. It periodically depends on the World Bank for its resources.
• Through the fund and other activities such as the gathering of statistics and analysis, surveillance of its members’ economies, and the demand for particular policies, the IMF works to improve the economies of its member countries.

Functions of the IMF

• To provide financial assistance to member countries with balance of payments problems, the IMF lends money to replenish international reserves, stabilize currencies and strengthen conditions for economic growth.
• Countries must embark on structural adjustment policies monitored by the IMF.
• It oversees the international monetary system and monitors the economic and financial policies of its 189 member countries.
• As part of this process, which takes place both at the global level and in individual countries, the IMF highlights possible risks to stability and advises on needed policy adjustments.
• It provides technical assistance and training to central banks, finance ministries, tax authorities, and other economic institutions.
• This helps countries raise public revenues, modernize banking systems, develop strong legal frameworks, improve governance, and enhance the reporting of macroeconomic and financial data.
• It also helps countries to make progress towards the Sustainable Development Goals (SDGs).

-Source: The Hindu