IMF Chief Sees Steady World Growth in 2025, Continuing Disinflation

 People visit the lantern festival at the Beijing's Wenyuhe Park in Beijing on January 4, 2025, to welcome the upcoming Chinese New Year on January 29, marking the beginning of the Year of the Snake. (AFP)
People visit the lantern festival at the Beijing's Wenyuhe Park in Beijing on January 4, 2025, to welcome the upcoming Chinese New Year on January 29, marking the beginning of the Year of the Snake. (AFP)
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IMF Chief Sees Steady World Growth in 2025, Continuing Disinflation

 People visit the lantern festival at the Beijing's Wenyuhe Park in Beijing on January 4, 2025, to welcome the upcoming Chinese New Year on January 29, marking the beginning of the Year of the Snake. (AFP)
People visit the lantern festival at the Beijing's Wenyuhe Park in Beijing on January 4, 2025, to welcome the upcoming Chinese New Year on January 29, marking the beginning of the Year of the Snake. (AFP)

The International Monetary Fund will forecast steady global growth and continuing disinflation when it releases an updated World Economic Outlook on Jan. 17, IMF Managing Director Kristalina Georgieva told reporters on Friday.

Georgieva said the US economy was doing "quite a bit better" than expected, although there was high uncertainty around the trade policies of the administration of President-elect Donald Trump that was adding to headwinds facing the global economy and driving long-term interest rates higher.

With inflation moving closer to the US Federal Reserve's target, and data showing a stable labor market, the Fed could afford to wait for more data before undertaking further interest rate cuts, she said. Overall, interest rates were expected to stay "somewhat higher for quite some time," she said.

The IMF will release an update to its global outlook on Jan. 17, just days before Trump takes office. Georgieva's comments are the first indication this year of the IMF's evolving global outlook, but she gave no detailed projections.

In October, the IMF raised its 2024 economic growth forecasts for the US, Brazil and Britain but cut them for China, Japan and the euro zone, citing risks from potential new trade wars, armed conflicts and tight monetary policy.

At the time, it left its forecast for 2024 global growth unchanged at the 3.2% projected in July, and lowered its global forecast for 3.2% growth in 2025 by one-tenth of a percentage point, warning that global medium-term growth would fade to 3.1% in five years, well below its pre-pandemic trend.

"Not surprisingly, given the size and role of the US economy, there is keen interest globally in the policy directions of the incoming administration, in particular on tariffs, taxes, deregulation and government efficiency," Georgieva said.

"This uncertainty is particularly high around the path for trade policy going forward, adding to the headwinds facing the global economy, especially for countries and regions that are more integrated in global supply chains, medium-sized economies, (and) Asia as a region."

Georgieva said it was "very unusual" that this uncertainty was expressed in higher long-term interest rates even though short-term interest rates had gone down, a trend not seen in recent history.

The IMF saw divergent trends in different regions, with growth expected to stall somewhat in the European Union and to weaken "a little" in India, while Brazil was facing somewhat higher inflation, Georgieva said.

In China, the world's second-largest economy after the United States, the IMF was seeing deflationary pressure and ongoing challenges with domestic demand, she said.

Lower-income countries, despite reform efforts, were in a position where any new shocks would hit them "quite negatively," she said.

Georgieva said it was notable that higher interest rates needed to combat inflation had not pushed the global economy into recession, but headline inflation developments were divergent, which meant central bankers needed to carefully monitor local data.

The strong US dollar could potentially result in higher funding costs for emerging market economies and especially low-income countries, she said.

Most countries needed to cut fiscal spending after high outlays during the COVID pandemic and adopt reforms to boost growth in a durable way, she said, adding that in most cases this could be done while protecting their growth prospects.

"Countries cannot borrow their way out. They can only grow out of this problem," she said, noting that the medium-growth prospects for the world were the lowest seen in decades.



ROSHN Group Signs SAR1.5 Billion Agreements

ROSHN Group Signs SAR1.5 Billion Agreements
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ROSHN Group Signs SAR1.5 Billion Agreements

ROSHN Group Signs SAR1.5 Billion Agreements

ROSHN Group, the Kingdom’s leading multi-asset class real estate developer and a PIF company, reinforced its commitment to fostering local content and driving economic growth at the third edition of the PIF Private Sector Forum. As part of its active participation, ROSHN Group announced new agreements worth SAR1.5 billion for construction operations and the development of infrastructure and retail facilities in SEDRA Community, the Group’s largest integrated development in Riyadh, SPA reported.
The agreements signed during the forum reflect ROSHN Group’s strategic efforts to strengthen the Kingdom’s construction sector, expand local expertise, and enhance supply chain localization. The contracts were awarded to local, Saudi-based contractors and a major international firm investing in local operations, further solidifying ROSHN Group’s role in enabling national capabilities.
The agreements were signed with several leading national and international contracting companies investing in the local market. The first agreement, valued at SAR650 million, was signed to develop more than 900 residential units and sports facilities at SEDRA Community. Another agreement was signed for the development of more than 700 residential units, supporting the continued expansion of the integrated community SEDRA. In addition, a SAR130 million agreement was signed for covering the construction of SEDRA’s first district retail mall. A fourth agreement, worth SAR720 million, was signed with for the development of more than 300 premium residential units in SEDRA.
"Our mandate at ROSHN Group extends beyond developing integrated projects; it plays a vital role in advancing Saudi Arabia’s economic diversification by strengthening local industries and expanding national capabilities," said Iain McBride, Executive Director, Commercial, ROSHN Group.