The International Monetary Fund logo is seen outside the headquarters building in Washington, US.
Credit: Reuters File Photo
Washington: The world's 20 largest economies will grow by just 2.9 per cent in 2030 amid headwinds from protectionism and policy uncertainty, their weakest medium-term outlook since the global financial crisis of 2009, the International Monetary Fund said on Wednesday.
In a report to the Group of 20, the global lender mapped out a series of challenges facing the global economy, including widening excessive balances and stretched public coffers, as well as aging populations in advanced economies.
The G20's advanced economies - the United States, Britain, Australia, Canada, France, Germany, Italy, Japan and South Korea - were forecast to see economic growth of just 1.4 per cent in 2030, it said. G20 emerging market economies - Argentina, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa and Turkey - should see stronger growth of 3.9 per cent, it said.
In 2025, the group's economic output was expected to expand by 3.2 per cent, down from 3.3 per cent last year, and moderating to 3.0 per cent in 2026.
Trump, Xi to skip G20 meeting
G20 leaders are due to meet in South Africa this weekend, minus US President Donald Trump, Chinese President Xi Jinping, and the leaders of Argentina and Mexico.
The meeting comes after a year of trade tensions and hikes in effective tariff rates led by the US, where Trump is seeking to re-shore domestic manufacturing and end what he calls decades of unfair trading conditions for US firms.
Disinflation was continuing, but headline inflation would still be around 3.5 per cent in G20 countries in 2025, the IMF said.
It said global inflation was expected to continue to decline in the near term as demand waned and energy prices dropped, but rising tariffs posed a risk in economies that were implementing higher duties, like the US.
It said high-frequency indicators already pointed to rising producer prices in the US and rising core inflation. US core inflation was not expected to return to the Federal Reserve's 2 per cent target until 2027, two years later than predicted in last year's IMF report to the G20, it said.
The IMF urged countries to cooperate to lower trade barriers and reduce uncertainty that was weighing on growth prospects, encouraging G20 members to adopt "clear and transparent trade policy road maps."
Trade deals should avoid purchase commitments and quantitative restrictions, the IMF said, without referencing any specific deals signed by the US and a host of its trading partners in recent months, many of which included purchase commitments.