IMF Warns of Economic Growth Hurdles and ‘Tepid Twenties’

By: Anneken Tappe · April 12, 2024 · Reading Time: 2 minutes

Growth With a Catch

The U.S. economy has been surprisingly strong in the face of high inflation, boosting the global economy to outperform expectations. But there may be clouds gathering on the horizon.

The International Monetary Fund (IMF) plans to increase its global growth forecasts in its coming projections. But there’s a catch. It also issued a firm warning that failing to resolve inflation and high debt levels could send the world into a sluggish decade — the “Tepid Twenties.”

Good News and Bad News

Let’s start with the good news. The IMF’s January projections showed 3.1% global economic growth in 2024 and 3.2% in 2025. In the revised projections due April 16th, the IMF is expected to marginally raise those estimates, thanks to strong consumer spending and investment, as well as improving supply chain dynamics.

However, alongside this rosy outlook, the IMF warned many countries still face elevated inflation and debt levels, which could pose a risk to the global economy in coming years. Case in point, U.S. consumer price inflation rose 3.5% year-over-year in March, well above the Federal Reserve’s 2% target.

Policy Solutions

IMF Managing Director Kristalina Georgieva cautioned central banks to avoid premature interest rate cuts and loosening their monetary policy too soon. Else, a potential resurgence of inflation could knock economic growth, and the much-discussed soft landing could be jeopardized. And economic growth is especially needed to reduce the relative debt loads governments are shouldering, too. So you see, the soft landing discussion never stopped.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

Communication of SoFi Wealth LLC an SEC Registered Investment Advisor

SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

TLS 1.2 Encrypted
Equal Housing Lender