Global Economic Forecasts: Q2 2024

April 2024

The global economy continues to witness resilience, supported by easing inflation, improved supply conditions and labour market strength. While an economic normalisation is underway, growth remains stagnant and below potential on the back of a still-high interest rate environment and more scrutinous businesses and consumers. The global outlook is also subject to significant downside risks, particularly geopolitical risks that could result in elevated commodity prices and supply disruptions.

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This report comes in PPT.

Key findings

Global economic outlook improves but stagnation and downside risks persist

The global short-term economic prospects continue to improve, driven by resilient growth in employment and incomes. Global real GDP growth is expected to reach 2.9% in 2024, slightly down from 3.1% in 2023 and remaining below the pre-pandemic levels. The slowdown is primarily due to the lagging effect of high interest rates and ongoing high costs for businesses and consumers, while downside risks remain dominant amid rising geopolitical tensions. Economic conditions normalise gradually, however, with further easing of inflation and loosening monetary policy expected later in 2024, supporting a steady growth momentum that will carry into 2025, when global growth is projected to reach 3.1%.

Major economies are stabilising, while facing ongoing challenges in 2024

The US economy continues to defy expectations and showed resilience in Q1 2024, leading to a further upgrade in its real GDP growth forecast to 2.1% in 2024. Nevertheless, ongoing challenges, including elevated interest rates, persistent inflation and high consumer debts will weigh on consumer spending and growth in the US. In the Eurozone, real GDP growth is expected to remain low at 0.7% in 2024, before it increases to 1.5% in 2025 amid easing inflation and expected rate cuts. Growth forecast for China is revised upward to 4.7% in 2024 on the back of stronger investments. However, a lingering real estate crisis and subdued private consumption will continue to restrain economic expansion in the world’s second largest economy.

Steady growth in developing and emerging economies, with some regional divergence

Emerging and developing economies will outperform advanced economies, with 2024 real GDP growth being estimated at 4.0% compared to 1.4% in advanced economies. Emerging Asian countries such as India, Indonesia, Vietnam and the Philippines are expected to witness some of the fastest growth rates globally, reflecting their continuing strength in domestic consumption and in attracting investments. Meanwhile, growth will remain subdued in some Latin American major emerging markets including Mexico and Brazil, on the back of softening domestic and external demands, fiscal consolidation and still-tight monetary policy. 

Key findings
Global baseline outlook: Economic prospects improve but stagnation persists
Global inflation outlook: Disinflation trend to continue at a more gradual pace
Renewed price pressures underline the risk of resurging global inflation
Risks to global economic growth still tilted to the downside
Real GDP annual growth forecasts and revisions from last quarter - AE
Real GDP annual growth forecasts and revisions from last quarter - EMDE
Inflation forecasts
Central bank interest rates quarterly forecasts
Global scenario map: Prevailing downside risks driven by geopolitical and economic factors
Global Risk Index scores and rankings
Commodity Price Hike scenario: Key risk to the global inflation reduction efforts
Global Fragmentation scenario: A major downside risk to the global economy
Europe Downturn scenario: Europe’s fragile recovery poses a risk to the global economy
US: Outlook improves on persisting strengths, but a slowdown is still expected
US: Renewed price pressures slow disinflation trend
U S: Business and consumer confidence stays muted amid a high-cost environment
US: Downside risks can threaten a soft landing for the economy
China: Real estate crisis and weak consumer demand remain a drag on the outlook
China: Business confidence improves slightly, yet consumer sentiment remains subdued
China: Deepening real estate crisis and global fragmentation are major threats
India: Robust investment and private consumption to drive strong economic growth
India: External risks and disruptions could drag down India’s growth potential
Japan: Economic outlook is subdued due to soft consumer spending
Japan: High exposure to commodity market risks remains a major concern
Indonesia: Robust momentum in the domestic market to support stable growth
Eurozone: Economic stagnation continues in 2024, followed by an acceleration in 2025
Eurozone: Easing inflation makes interest rate cuts more likely, but risks remain
Eurozone: Recession risk remains amid multiple downside scenarios
UK: Growth to remain muted as high borrowing costs and prices dent consumer spending
UK: External risks will continue to influence the UK’s economic prospects
Russia: Economy showcases resilience, but growth is expected to decelerate
Russia: Outlook remains highly uncertain, with ramifications of the war being a major risk
Brazil: Economic growth to moderate on softer household demand
Brazil: A range of domestic and global headwinds could cloud the outlook
Mexico: Economy stays on course for growth, yet softer consumer demand to limit expansion
Baseline and alternative scenarios: Q2 2024
Alternative scenarios (cont.): Q2 2024
Alternative scenarios (cont.): Q2 2024


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