IMF Chief Economist Pierre-Olivier Gourinchas discusses the raised global growth forecast for this year due to US expansion and Chinese fiscal stimulus. Topics include resilient economies, AI productivity impact, risks from wars and inflation, interest rates, cybersecurity, elections, fiscal policy, adjustments in the US and South Africa, challenges of taxes, disruptions in maritime shipping, and growth prospects in Saudi Arabia and the euro area.
The IMF has raised its global growth forecast for 2024, citing resilience in economies like the US, China, Brazil, India, and Southeast Asian economies.
AI has the potential to significantly impact global productivity growth, with winners likely to be companies that make significant upfront investments in AI technology.
Deep dives
Global Growth Forecast for 2024
The IMF has increased its growth forecast for 2024, with resilience observed in economies such as the US, China, Brazil, India, and Southeast Asian economies. Strong demand, unwinding supply chain restrictions, lower energy prices, and strong labor markets are contributing to the growth.
Concerns about China's Property Sector and Medium-Term Growth Prospects
China's property sector has been a concern, leading to slightly lower growth forecast for China in 2024. The Chinese government's fiscal package aimed at supporting consumption and investment has had some impact, but declining productivity growth and demographics pose challenges to China's medium-term growth prospects.
Impact of AI on Productivity Growth and AI Race between China and the US
AI has the potential to significantly impact productivity growth globally. Different levels of preparedness and disruptions in labor markets are expected. The IMF's study reveals winner-take-all dynamics in the AI race, with companies making significant upfront investments likely to capture sizable returns. The full impact on productivity growth is still uncertain and may take several years to materialize.
The International Monetary Fund raised its forecast for global growth this year on better-than-expected expansion in the US and fiscal stimulus in China, while warning of risks from wars and inflation. IMF Chief Economist Pierre-Olivier Gourinchas spoke to Bloomberg's Jennifer Zabasajja in Johannesburg.