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China and India to lead global GDP growth followed by the US, says IMF report

China and India will lead the global GDP expansion in the coming years, followed by the United States, according to a recent report by the International Monetary Fund (IMF). The report analysed data from the IMF's World Economic Outlook and found that China will contribute 22.6% of the world's GDP expansion, followed by India at 12.9%, and the US at 11.3%. However, China's contribution to global growth is expected to be nearly double that of the US and India combined.

The report highlighted that the global growth forecast is expected to fall from 3.4% in 2022 to 2.8% in 2023, before settling at 3% in 2024. The IMF anticipates growth contributions from BRICS nations, including Brazil, Russia, India, and China, to outpace those of Group of Seven (G-7) nations. The IMF further noted that nearly 75% of global growth will stem from just 15 nations, with China, India, the US, and Indonesia accounting for over 50% of this growth.

However, the IMF's report also raised concerns about the recent bank turmoil in the US, including the collapse of Silicon Valley Bank (SVB), Signature Bank, and the troubles faced by Silvergate Bank. The report also highlighted persistent challenges faced by other prominent financial institutions, such as Credit Suisse, which recently announced a merger with UBS. The IMF report also noted that sticky inflation has heightened the challenges for the global economy and ramped up the chances of a deeper recession than earlier anticipated.

The IMF expects that advanced economies will experience an especially pronounced growth slowdown, falling from 2.7% in 2022 to 1.3% in 2023. The report stated that the risks to the outlook are heavily skewed to the downside, with the possibility of a hard landing having risen sharply. The IMF anticipates global growth to expand by about 3% over the next five years in a higher-interest-rate environment. This is the weakest growth outlook projection by the IMF in over three decades.

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