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Context: 

The International Monetary Fund (IMF) released the October edition of the World Economic Outlook.

International Monetary Fund (IMF)

It is an International Organization which promotes global economic growth, financial stability, international trade, and poverty reduction.

It was founded in 1945 after the Bretton Woods conference.

• The Bretton Woods conference was held in 1944 after the conclusion of World War II. 
• The Agreement in the conference established the International Bank for Reconstruction and Development, which later became part of the World Bank Group and the International Monetary Fund (IMF)

Roles 

The original goal of the organisation was to coordinate international economies and prevent currency devaluations aimed at boosting global exports.

Its current role shifted to become the lender of last resort for countries facing severe currency crises.

Key publications of IMF:

Global Financial Stability Report: A biannual report like WEO to assess the stability of the global financial system and markets.

World Economic Outlook.

World Economic Outlook (WEO):

It is a biannual report of the IMF published twice a year.

One report is published in April and the other one in October. Apart from this, less comprehensive World Economic Outlook (WEO) updates are also published in July and January.

The report is about the estimates and forecasts of the IMF for global output and inflation trends in the 190 member countries of the IMF, grouped by region and development status. 

The data is generally drawn from IMF consultations with member countries. 

WEO October 2024 findings:

Global Economic Status:

The recession which was much feared globally has been avoided.

Inflation is under control and the global fight against inflation is almost won with steady growth. Inflation to fall further to 4.3% by 2025. Inflation moderation is due to the decline in shocks from COVID-19, the Ukraine war and tight monetary policies.

The United States is expected to grow faster in 2024 than Europe, whose growth has declined.

The IMF has forecasted a 3.2% global growth in both 2023 and 2024. 

In the long term, the IMF, however, projects global growth at a mediocre 3.1% in five years which is below pre-COVID trends.

Developing and Emerging Asia Outlook: 

The growth prospects for West Asia, sub-Saharan Africa, and Central Asia have been downgraded due to conflicts and unrest. 

However, higher public investments in China and India will improve growth prospects.

High food prices in some emerging markets and high inflation in services remain concerns.

Economic Outlook of India:

The IMF has maintained the GDP growth estimate of India at 7% for 2024-25 and 6.5% in the following year, as the pandemic-driven pent-up demand will fade after 2024-25. 

However, the GDP growth of India for Q2 is forecasted at 6.8%, higher than 6.7% in Q1 by the Reserve Bank of India.

A good monsoon and improved rural incomes might further enhance the growth.

Overall the Global economic outlook is moderate, however, Sluggish exports and investment flows along with inflations might impact the trend. 

Pent-Up Demand It is a situation where demand for products or services is strong due to the general public's return to consumerism after a period of decreased spending.

Important articles for reference

Global Financial Stability Report

Sources:

THE HINDU

IMF

WIKIPEDIA

PRACTICE QUESTION Q.Consider the following statements about the World Economic Outlook (WEO):  It is a report of the estimates and forecasts of the global output and inflation trends by World Bank Groups. It is published annually. The October 2024 outlook for the US is worse than that of Europe. Which of the above  statements are incorrect?  A. 1 and 2 only B. 1 and 3 only C. 1, 2 and 3 only D. None Answer: C Explanation: Statement 1 is incorrect:  It is a biannual report of the IMF published twice a year. One report is published in April and the other one in October. Apart from this, less comprehensive World Economic Outlook (WEO) updates are also published in July and January. The report is about the estimates and forecasts of the IMF for global output and inflation trends in the 190 member countries of the IMF, grouped by region and development status.  The data is generally drawn from IMF consultations with member countries.  WEO October 2024 edition is one such publication of its series. Statement 2 is incorrect:  It is published biannually. Statement 3 is incorrect:  WEO October 2024 findings: The recession which was much feared globally has been avoided. Inflation is under control and the global fight against inflation is almost won with steady growth. Inflation to fall further to 4.3% by 2025. Inflation moderation is due to the decline in shocks from COVID-19, the Ukraine war and tight monetary policies. The United States is expected to grow faster in 2024 than Europe, whose growth has declined. The IMF has forecasted a 3.2% global growth in both 2023 and 2024.  Economic Outlook of India: The IMF has maintained the GDP growth estimate of India at 7% for 2024-25 and 6.5% in the following year, as the pandemic-driven pent-up demand will fade after 2024-25. However, the GDP growth of India for Q2 is forecasted at 6.8%, higher than 6.7% in Q1 by the Reserve Bank of India.