Global growth is set to slow in 2024 as a result of high cost pressures for businesses and consumers, especially high interest rates. Asia Pacific will continue to stand out as the main global growth region while advanced economies decelerate. However, the global economy is also expected to see a relative normalisation following consecutive years of disruption with inflation slowing notably and monetary policy loosening again, providing the foundation for reaccelerating global growth in 2025.
This report comes in PPT.
In 2024, global real GDP growth is expected to slow to 2.7%, unchanged from the Q4 2023 forecast, following 3.0% in 2023. This slowdown is primarily due to the lagging effect of high interest rates and ongoing cost pressures for businesses and consumers globally. Yet, the global economy will experience a gradual normalising of economic conditions, particularly in the second half of 2024, with expectations of inflation further easing and monetary policy loosening. This will support an accelerating growth momentum that will carry into 2025, when global growth is projected to increase to 3.1%.
The US economy consistently outperformed expectations in 2023 which fuelled momentum going into 2024. While this resulted in a significant upward revision of real GDP growth to 1.5%, it nonetheless marks a slowdown as higher interest rates eventually slow economic activity. Economic growth in the Eurozone is expected to remain low at 0.8% in 2024, though slightly recovering as inflation eases considerably. China’s economy is expected to decelerate to 4.5% growth in 2024 as the country continues to grapple with its ailing property sector that keeps business weak and consumer confidence subdued.
Following a diverging growth trend between developing and advanced economies in 2023, both sets of economies are expected to slow in 2024. Yet, emerging and developing economies significantly outperform advanced economies in terms of real GDP growth at 3.9% compared to 1.7%. Key driver among emerging and developing economies will continue to be Asia Pacific, the fastest growing region globally. Here, numerous economies defy the global trend with high growth in 2024, including India (6.1%), Indonesia (4.9%), Philippines (5.6%) and Vietnam (5.8%). These economies will even see accelerating growth momentum in 2025.
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