Costs momentarily halted.
The International Monetary Fund (IMF) has recently revised its global GDP growth forecast for the years 2024 and 2025. For 2024, the projected growth stands at 3.0%, an upward revision from the earlier forecast of 2.8%. The growth projection for 2025 has been further revised upwards to 3.1%, representing a 0.1 percentage point increase over the previous forecast of 3.0%.
This optimistic outlook is attributed to factors such as lower-than-expected tariff rates, easier financial conditions including a weaker US dollar, and fiscal expansion in some major economies. However, Russia's growth prospects have been revised downward for both years, while other major economies such as the US, China, and the UK have stable or slightly increased growth forecasts.
In Russia, the GDP growth forecast for 2024 and 2025 has been revised downwards, suggesting weaker growth relative to other major economies. This downward revision is in contrast to the global economic outlook, which has shown slight improvement.
In the United States, industrial production rose 0.6% M/M in June, above expectations, following a 0.9% increase in May. However, the availability of new domestic harvests has led to a 3% increase in cucumber prices since the start of July.
China, on the other hand, has seen significant economic activity. Trade between China and Russia reached a record $117 billion in the first half of 2024, with China's exports to Russia totaling $51.7 billion and imports from Russia reaching $65.2 billion. China's exports grew 8.6% Y/Y in June, while imports fell 2.3% Y/Y, resulting in the largest monthly trade surplus since 1990.
Despite a 0.1% M/M decrease in retail sales growth in June, China's yearly retail sales growth slowed to 2.0% Y/Y. The growth rate of food expenditure increased from 13.7% to 14.2%, while that of non-food goods decreased from 14.4% to 12.3%.
Inflation in China has been on the rise, with the main contributors being planned increases in utilities tariffs, rising prices for unregulated services, and the traditional summer increase in construction materials. Consumer prices in Russia, however, have shown a slight decrease, with a 0.11% over-the-week drop in prices as of July 15.
Industrial production growth in China remains stable, with a 5.3% Y/Y increase in June and a 6.0% Y/Y increase for H1 2024. Fixed asset investment in China grew 3.9% Y/Y for H1 2024.
In Europe, the economy experienced a decline in May, driven by a 1.8% M/M decrease in durable goods production, a 1.2% M/M drop in investment goods, and a 1.0% M/M decline in intermediate goods.
Potatoes have seen the largest year-to-date price increase of 91%, while cucumbers have seen the largest decrease in price among all goods, down 40.3% year-to-date.
The IMF has left its April forecast for global economic growth in 2024 unchanged at 3.2%. The forecast for global GDP growth in 2025 has been improved by 0.1 percentage points to 3.3%. If these forecasts materialize, Russia's economic growth rate this year will be lower than that of the US (+2.6%), Japan (+0.7%), and the Eurozone (+0.9%).
[1] International Monetary Fund (2024). World Economic Outlook Update, July 2024. [Online] Available: https://www.imf.org/en/Publications/WEO/Issues/2024/07/20/World-Economic-Outlook-Update-July-2024
[2] International Monetary Fund (2024). Regional Economic Outlook: Europe, July 2024. [Online] Available: https://www.imf.org/en/Publications/REO/Issues/2024/07/20/Regional-Economic-Outlook-Europe-July-2024
[3] International Monetary Fund (2024). Regional Economic Outlook: Asia and Pacific, July 2024. [Online] Available: https://www.imf.org/en/Publications/REO/Issues/2024/07/20/Regional-Economic-Outlook-Asia-and-Pacific-July-2024
[4] International Monetary Fund (2024). Regional Economic Outlook: Middle East and Central Asia, July 2024. [Online] Available: https://www.imf.org/en/Publications/REO/Issues/2024/07/20/Regional-Economic-Outlook-Middle-East-and-Central-Asia-July-2024
- The global economic outlook, as projected by the International Monetary Fund (IMF), includes a 0.1 percentage point increase in the forecast for global GDP growth in 2025, suggesting a positive trend in finance-related matters.
- Russia's economic growth, in contrast, has been revised downwards for both 2024 and 2025, potentially indicative of challenges in certain finance sectors.
