




IMF declares global fight against high inflation is ‘almost won’ | PBS News














































































































































 








































































































































































































































































































       




         


































































Full Episode










Tuesday, Feb 18






Close Menu




PBS NewsHour



Episodes
Podcasts
Newsletters





The Latest




Politics



Brooks and Capehart
Politics Monday
Supreme Court






Arts



CANVAS
Poetry
Now Read This






Nation



Supreme Court
Race Matters
Essays
Brief But Spectacular






World



Agents for Change






Economy



Making Sen$e
Paul Solman






Science



The Leading Edge
ScienceScope
Basic Research
Innovation and Invention






Health



Long-Term Care






Education




Teachers' Lounge
Student Reporting Labs






For Teachers



Newshour Classroom





About


Feedback
Funders
Support
Jobs






Close Menu













Close Popup





Share your email and we’ll share the latest trusted news













Enter your email address


Subscribe


                                        No Thanks
                                    

Form error message goes here.

Thank you. Please check your inbox to confirm.


                                    Close
                                










PBS News











Menu



Notifications


Get news alerts from PBS News
Turn on desktop notifications?
Yes
Not now





Full Episodes
Podcasts
Newsletters
Live

























By —


Paul Wiseman, Associated Press


                    Paul Wiseman, Associated Press
                







Leave your feedback





Share




Copy URL
https://www.pbs.org/newshour/nation/imf-declares-global-fight-against-high-inflation-is-almost-won



                  Email




                  Facebook




                  Twitter




                  LinkedIn




                  Pinterest




                  Tumblr






Share on Facebook



Share on Twitter







IMF declares global fight against high inflation is ‘almost won’
Nation


                                Oct 22, 2024 2:30 PM EST
            



WASHINGTON (AP) — The global war against inflation has largely been won — and at surprisingly little cost to economic growth, the International Monetary Fund declared Tuesday.
In its latest assessment of the global economy, the IMF predicted that worldwide inflation will cool from 6.7% last year to 5.8% this year and to 4.3% in 2025. It estimates that inflation will fall even faster in the world’s wealthy countries, from 4.6% last year to 2.6% this year and 2% — the target range for most major central banks — in 2025.
The slowdown in inflation, after years of crushing price increases in the aftermath of the pandemic, led the Federal Reserve and the European Central Bank to cut interest rates this year after they had aggressively raised them to try to tame inflation.
“The battle against inflation is almost won,″ Pierre-Olivier Gourinchas, the IMF’s chief economist, told reporters Tuesday. ”In most countries, inflation is hovering close to central bank targets.″
READ MORE: U.S. inflation drops to lowest point in 3 years at 2.4 percent, some price pressures remain
Inflation had accelerated when the world economy recovered with unexpected speed from the COVID-19 recession, leaving factories, freight yards, ports and businesses overwhelmed with customer orders and creating shortages, delays and higher prices. The high borrowing rates engineered by major central banks, along with the end of supply chain logjams, brought inflation dramatically down from the four-decade highs it hit in mid-2022.
And to the surprise of forecasters, the economy — especially the largest, in the United States — continued to grow and employers kept hiring despite higher borrowing costs.
“The decline in inflation without a global recession is a major achievement,” Gourinchas wrote in a blog post that accompanied the IMF’s latest World Economic Outlook.
The IMF, a 190-nation lending organization, works to promote economic growth and financial stability and reduce global poverty. On Tuesday, besides sketching a milder inflation outlook, it upgraded its economic expectations for the United States this year, while lowering its estimates for growth in Europe and China. The IMF left its forecast for global growth unchanged at a relatively lackluster 3.2% for 2024.
The IMF expects the U.S. economy to expand 2.8% this year, down slightly from 2.9% in 2023 but an improvement on the 2.6% it had forecast for 2024 back in July. Growth in the United States has been led by strong consumer spending, fueled by healthy gains in inflation-adjusted wages.
Next year, though, the IMF expects the U.S. economy to decelerate to 2.2% growth. With a new presidential administration and Congress in place, the IMF envisions the nation’s job market losing some momentum in 2025 as the government begins seeking to curb huge budget deficits by slowing spending, raising taxes or some combination of both.
The IMF expects China’s economic growth to slow from 5.2% last year to 4.8% this year and 4.5% in 2025. The world’s No. 2 economy has been hobbled by a collapse in its housing market and by weak consumer confidence — problems only partly offset by strong exports.
The 20 European countries that share the euro currency are collectively expected to eke out 0.8% growth this year, twice the 2023 expansion of 0.4% but a slight downgrade from the 0.9% the IMF had forecast three months ago for 2024. The German economy, hurt by a slump in manufacturing and real estate, isn’t expected to grow at all this year.
Now that interest rates are coming down and likely to aid the world’s economies, the IMF warned, the need to contain enormous government deficits will likely put a brake on growth. The overall world economy is expected to grow 3.2% in both 2024 and 2025, down a tick from 3.3% last year. That’s an unimpressive standard: From 2000 through 2019, before the pandemic upended economic activity, global growth had averaged 3.8% a year.
The IMF also continues to express concern that geopolitical tension, including antagonism between the United States and China, could make world trade less efficient. The concern is that more countries would increasingly do business with their allies instead of seeking the lowest-priced or best-made foreign goods. Still, global trade, measured by volume, is expected to grow 3.1% this year and 3.4% in 2025, improving on 2023’s anemic 0.8% increase.
Gourinchas also suggested that economic growth could end up being weaker than expected if countries take steps to reduce immigration, which has helped ease labor shortages in the United States and other advanced economies. And he said armed conflicts, like those in Ukraine and the Middle East, could also threaten the economic outlook.
India’s economy is expected to 7% this year and 6.5% in 2025. While still strong, that pace would be down from 8.2% growth last year, a result of consumers slowing their spending after a post-pandemic boom.
The IMF predicts that Japan’s economy, hurt by production problems in the auto industry and a slowdown in tourism, will expand by a meager 0.3% this year before accelerating to 1.1% growth in 2025.
The United Kingdom is projected to register 1.1% growth this year, up from a dismal 0.3% in 2023, with falling interest rates helping spur stronger consumer spending.





Left:
                FILE PHOTO: The International Monetary Fund headquarters is seen in Washington, U.S., April 8, 2019. REUTERS/Yuri Gripas/File Photo
    


Related



Most voters think the economy is poor and are split on whether Trump or Harris can fix it, polls finds
By Steve Peoples, Linley Sanders, Associated Press




Driving retail spending, wealthier Americans are powering U.S. economy
By Christopher Rugaber, Associated Press




Fed’s favored inflation gauge shows cooling price pressures, clearing way for more rate cuts
By Christopher Rugaber, Associated Press





Go Deeper

economy
inflation
international monetary fund








By —


Paul Wiseman, Associated Press


                    Paul Wiseman, Associated Press
                










Support Provided By:
Learn more









Educate your inbox
Subscribe to Here’s the Deal, our politics
                 newsletter for analysis you won’t find anywhere else.










Enter your email address


Subscribe


Form error message goes here.

Thank you. Please check your inbox to confirm.












Full Episode










Tuesday, Feb 18








































PBS News


© 1996 - 2025 NewsHour Productions LLC. All Rights Reserved.
PBS is a 501(c)(3) not-for-profit organization.



Sections

The Latest
Politics
Arts
Nation
World
Economy
Science
Health
Education



About

About Us
TV Schedule
Press
Feedback
Funders
Support
Newsletters
Podcasts
Jobs
Privacy
Terms of Use



Stay Connected



Facebook





YouTube





Instagram





X





TikTok





Threads





RSS





Subscribe to Here's the Deal with Lisa Desjardins











Enter your email address


Subscribe


Form error message goes here.

Thank you. Please check your inbox to confirm.







Support our journalism
Learn more about Friends of the News Hour.






Support for News Hour Provided By































 




> [World inflation is now 5.8% after peaking at 9.4%.](https://mynbc15.com/news/nation-world/worlds-battle-against-inflation-is-almost-won-imf-international-monetary-fund-world-economic-outlook-ing-jobs-market-american-consumers)
>
> [In the U.S., we’re already under 2.5% inflation.](https://mynbc15.com/news/nation-world/worlds-battle-against-inflation-is-almost-won-imf-international-monetary-fund-world-economic-outlook-ing-jobs-market-american-consumers)


Guess we can't blame the VP for inflation.