Global Economic Forecasts: Q1 2024

January 2024

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.

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This report comes in PPT.

Key Findings

Global growth set to slow in 2024 before reaccelerating in 2025

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%.

Major economies face distinct trajectories and challenges in 2024

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.

Asia Pacific remains growth driver amid weak global backdrop

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.

Key findings
Global baseline outlook: Growth expected to slow in 2024 before reaccelerating in 2025
Global inflation expected to moderate further in 2024: Though at a slowing pace
Inflation risk rises as cumulation of geopolitical conflicts causes renewed price pressures
Sub-trend global growth in 2024 is further threatened by multitude of economic risks
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: Risks to economic growth remain tilted to the downside in 2024
Global Risk Index scores and rankings
Global Fragmentation scenario: The main downside scenario to the global economy
Commodity Price Hike scenario: Key risk to the slowdown of inflation in 2024
US: Ongoing economic resilience fuels improved outlook despite slowdown in 2024
US: Steady easing of underlying price pressures signals further inflation moderation in 2024
U S: Business and consumer confidence expected to recover in the second half of 2024
US: Soft landing for the US economy in 2024 threatened by high-risk environment
China: Property downturn and deflationary pressures cast a shadow over the outlook
China: Business and consumer confidence subdued as recovery struggles to gain momentum
China: Spreading property market woes and global fragmentation among key risks
India: Growth to remain strong on the back of robust public investment
India: Intensifying trade disruptions could undermine India’s growth potential
Japan: Economic growth to moderate amid softer domestic and foreign demand
Japan: Commodity market shocks and global slowdown among the key risks
Indonesia: Strong outlook is supported by robust domestic demand
Eurozone: Economic weakness will persist most of 2024 before slight recovery sets in
Eurozone inflation expected to moderate close to the ECB target in 2024
High vulnerability to multiple downside scenarios raises risk of Eurozone recession in 2024
UK: Growth to remain modest on persisting price pressures and high borrowing costs
UK: External developments will continue to have a strong impact on UK’s economic outlook
Russia: Economy grows on higher public spending, but outlook remains shaky
Russia: Major risks are stemming from harder spillovers from the war in Ukraine
Brazil: High interest rates and lower agricultural output weaken 2024 growth outlook
Brazil: Economic growth is vulnerable to a diverse set of domestic and global risks
Mexico: The economy maintains growth momentum despite record-high interest rates
Baseline and alternative scenarios: Q1 2024
Alternative scenarios ( cont /d): Q1 2024


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