The global economy continues to see stable growth in the second half of 2024, backed by moderating inflation and resilient consumer spending in key advanced markets. Global real GDP growth is, however, expected to remain lower than pre-pandemic levels, and stagnate through to 2025. As well as a slow growth environment, businesses and consumers still face uncertainties, as the global economic outlook is subject to widening risks, driven by various economic, geopolitical and climate factors.
This report comes in PPT.
The global economy continued to see steady growth in H2 2024, driven by sustained private consumption and moderating inflation, while monetary policies started to ease in key markets. Global real GDP growth is expected to stay at 3.2% in 2025, the same as in 2024, remaining muted compared to the pre-pandemic levels of 3.7% over 2010-2019. Still tight financial conditions, and weak consumer and business confidence will keep global economic growth modest in the short and medium term. In addition, downside risks still dominate, with rising geopolitical tensions, policy uncertainty and the possibility of debt distress in developing economies, and a deepening economic downturn in China.
The US economy continues to beat expectations, leading to a further upgrade in its real GDP growth forecast to 2.6% in 2024. Momentum is, however, set to soften in 2025, as some costs remain elevated, the labour market is expected to cool down, with consumption slowing. In the Eurozone, economic growth is projected to improve in 2025, but the regions recovery remains the weakest among key economies. China’s growth outlook for 2025 shows an improvement, supported by a new stimulus push by the government in Q3 2024. However, China is still struggling to meet the official GDP growth target of 5% annually, due to its ailing property sector, weak domestic demand and sluggish exports.
The global disinflation process could reach a milestone in 2025, as inflation is expected to return to its target of 2% in key markets. Coupled with falling interest rates, a stabilisation in prices should provide some financial relief for businesses and consumers. However, escalating trade tensions, geopolitical risks and climate shocks represent major upside risks that could change the outlook for global inflation.
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