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World growth outlook improves, but inflation shows persistence: Fitch

15 Mar '24

2 min read

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Near-term world growth prospects have improved, with Fitch Ratings raising its 2024 global GDP growth forecast by 0.3 pp to 2.4 per cent.
The forecast for emerging markets excluding China has been revised by 0.1 pp to 3.2 per cent, with projections raised for India, Russia and Brazil.
Fitch expects 2025 world growth to rise to 2.5 per cent (unchanged).

Near-term world growth prospects have improved, with Fitch Ratings raising its 2024 global gross domestic product (GDP) growth forecast by 0.3 percentage point (pp) to 2.4 per cent in its latest Global Economic Outlook (GEO). This reflects a sharp upward revision to the US growth forecast to 2.1 per cent from 1.2 per cent in the December 2023 GEO.

The revision to the US outweighs a marginal cut to the rating agency’s China growth forecast for this year—to 4.5 per cent from 4.6 per cent—and a small revision to its eurozone forecast—to 0.6 per cent from 0.7 per cent.

The growth forecast for emerging markets excluding China has been revised by 0.1 pp to 3.2 per cent, with projections raised for India, Russia and Brazil.

Fitch expects world growth in 2025 to edge up to 2.5 per cent (unchanged from before) as the eurozone finally recovers on a pick-up in real wages and consumption, but US growth slows.

The eurozone continues to stagnate, with Germany’s recession weighing on France and the rest of the bloc. China’s property collapse continues unabated.

US core inflation momentum has recently picked up and we have raised Fitch’s end-2024 US consumer price index (CPI)-based inflation forecast by 0.3 pp to 2.9 per cent. Better progress has been made in reducing core inflation in the Eurozone.

The jump in shipping costs is adding upside risks to core goods inflation, Fitch added.

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