The global economic outlook for the coming years is beginning to take shape, and financial markets are abuzz with speculation about deep cuts in interest rates. According to a recent poll, stable forecasts indicate that global growth is expected to remain resilient throughout 2024, with a slight increase expected in 2025.
Divergent growth paths among leading economies
Despite the overall positive outlook, expected growth paths vary among leading economies. The United States and India are expected to show relative strength, indicating a promising economic outlook. On the other hand, the Eurozone and China, the second largest economy in the world, are facing an expected slowdown. This difference highlights the complex and interconnected nature of the global economic landscape, with regional factors greatly shaping growth prospects.
Inflation elasticity and central bank actions
Economists are generally optimistic that inflation will not rise again. This optimism is based on the belief that central banks, having successfully managed to reduce price pressures close to their targets, are able to maintain this stability.
Labor market strength and upside risks to growth
The still tight labor market prevailing in most developed countries further highlights the resilience of the global economy. With consumer and government spending showing resilience, risks to growth are mostly to the upside. This positive momentum is a testament to the ability of economies to adapt and their strength in the face of challenges.
Looking back, the economists surveyed, who were overly pessimistic about growth in 2023 last year, now look more optimistic. Their initial forecast of 2.1% growth for 2023 was exceeded, reinforcing the inherent dynamism of the global economic landscape. Looking ahead, the expected acceleration of global growth to around 3.0% in 2025 and 2026 indicates sustainable economic vitality.
