IMF: China and India unstoppable, while the rest of the world slows down

In its latest Outlook for April, the International Monetary Fund (IMF) shows a global economic environment that has fallen to historic lows, especially in the advanced economies, with half of the world's growth appanaged by the two Asian giants, India and China: forecasts in line with those put together by the Mecs Study Center in its annual "Cube" forecast report on the evolution of the packaging technology market, a reliable thermometer of the economy because it is diversified across all downstream FMCG sectors.

On the global macroeconomic front, the scenario that emerges in the IMF's April World Economic Outlook is gloomy due to difficulties in the financial markets, challenged by the sharp rise in inflation, high interest rates and the failures of the two U.S. banks and Credit Suisse. Indeed, global growth estimates are downgraded to a modest +2.8 percent for 2023. This is at the lowest since 1990, in a vulnerable international economic environment that puts the position of the major advanced economies at risk.

Mirroring the IMF are the estimates in the new edition of the "Cube" econometric model by the Ucima-MECS Study Center, according to which world growth in packaging machinery after the pandemic crisis will stop at +3.8 percent per year between now and 2026, recovering from the previous edition, but below the pre-Covid dynamic.

In this context, it is India and China that lead the way: the dizzying growth of the Indian market allows the IMF to estimate +6% GDP in 2024, while China is expected to slow down, though remaining above world averages: +5.2% in 2023; +4.5% in 2024. These two powers make up half of global growth in 2023, the IMF calculates, with a GDP increase of more than 5 percent: a trend that is also found in the world of packaging, as shown by the growth forecasts to 2026: for India they exceed 7 percent, according to the "Cube," while for China they are close to 4 percent, values that are higher than the world dynamic.

However, this strong Asian development is confronted with an opposite trend in the rest of the world: the Russian-Ukrainian conflict has put a strain on the growth of the involved and neighboring countries:  while the IMF forecasts a timid recovery in Russia this year (+0.7 percent) and a slowing of the fall in Ukraine (-3 percent, after -30 percent in 2022), for the packaging sector the recovery is still far off: the Mecs Study Center estimates for both a decline that stands at -12 percent for Russia, the worst estimate of all the countries surveyed, and a -3 percent for Ukraine.

The eurozone is going slow, as evidenced by the +1.3 percent estimated for 2024 by the IMF, accompanied by a 3.5 percent annual average for the packaging market evolution according to Mecs: two indices both below the world average.