Italy's demand is expected to benefit from the EU-financed National Recovery and Resilience Plan, while Germany has been adversely affected by fiscal consolidation and a decline in real estate prices.
Eurozone growth in 2025 is projected to increase to 1.2% on the back of strengthening domestic demand, while US growth is expected to decrease to 2.2% in 2025 as the gradual loosening of monetary policy and the cooling of the labor market slow down consumption.
IMF stated “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,” and concluded: “Manufacturing production is also increasingly shifting toward emerging market economies – in particular, China and India – as advanced economies lose competitiveness.”
IMF noted that the European Union lowered its 2024 growth forecast based on the weak manufacturing industry in Germany and Italy. The US economy is expected to continue to grow with strong consumption and investments. The report pointed out structural changes in the global economy, such as the shift from goods consumption to services consumption and the shift of the manufacturing sector to developing countries. Developed economies need to adapt to this change, it was emphasized.
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