The global economic forecast for 2024 is marked by challenges stemming from escalating conflicts, sluggish global trade, persistently high interest rates, and increasing climate disasters. The United Nations projects that global economic growth will slow to 2.4% in 2024, down from an estimated 2.7% in 2023. Here are some key points to consider for the 2024 economic outlook:
Inflation: S&P Global Market Intelligence analysts forecast annual global consumer price inflation at 4.7% in 2024, down from an estimated 5.6% in 2023. J.P. Morgan predicts core PCE prices, the Feds preferred inflation metric, to rise 2.4% in 2024, down from 3.4% in 2023.
GDP Growth: J.P. Morgan expects real GDP growth to be below-trend at 0.7% in 2024, after tracking to a better-than-expected 2.8% in 2023. S&P Global forecasts global annual real GDP growth at 2.3% in 2024.
Interest Rates: The Federal Reserve is expected to maintain a slow pace of interest rate hikes in 2024, with J.P. Morgan predicting a below-trend pace of expansion.
Consumer Spending: Consumer spending is expected to rise at a more muted pace in 2024, with real disposable personal income growth struggling and pandemic savings dwindling.
Housing Sector: A significant drop in housing sector activity is expected, with activity predicted to drop 30%-40%.
US Economy: Forecasters expect the US economy to grow by 1.3% in 2024, down from a projected 2.4% in 2023. The Federal Reserve is expected to cut interest rates three times in 2024, lowering borrowing costs for consumers and businesses.
Job Growth: Slower consumer spending and a cooling economy are expected to reduce average monthly job gains in 2024.
Mainland China’s Economy: Mainland China’s economy is forecast to recover slowly, with annual real GDP growth of 4.7% in 2024, down from an expected 5.4% in 2023.
Financial Headwinds: Financial headwinds to growth are expected to persist in 2024.
Currency: The US dollar is expected to depreciate in 2024, with the yen expected to appreciate against the US dollar more strongly than many of its peers.
The economic forecast for 2024 is cautious, with a slower global economic growth rate and challenges arising from various factors. However, there are some positive signs, such as a potential easing of inflation and tentative plans by the Federal Reserve to cut interest rates.