IMF raises UK growth forecasts for 2024
The International Monetary Fund has upgraded its projections for UK economic growth for 2024 as falling inflation and interest rates stimulate domestic demand.
In its latest biannual World Economic Outlook released on Tuesday, the IMF said it expects UK GDP to expand by 1.1% this year, up from just 0.3% in 2023.
In its previous update in July, the financial agency had pencilled in growth of 0.7%.
For 2025, economic growth is projected to accelerate to 1.5%, unchanged from the previous estimate.
The IMF said that economies like the UK that rely heavily on the services sector have grown steadily this year, compared with more industrial nations like Germany which have struggled.
“Relative to prepandemic trends, goods prices remain elevated compared with those for services, a lingering effect of the pandemic and its aftermath, which saw strong demand for goods alongside supply constraints,” the IMF said.
“Consequently, behind stable growth figures, a global shift from goods to services consumption is underway. This rebalancing is tending to boost activity in the services sector in advanced and emerging markets but is dampening manufacturing.”
Germany’s economy is expected to flatline this year after contracting by 0.3% in 2023, as the IMF downgraded its projection by 0.2 percentage points to 0%, before growing by 0.8% in 2025.