The Conference Board revises up 2024 global real GDP forecast to 2.8%

It continues to anticipate a modest downshift from the stronger 3.1 per cent pace last year.

The 2.9 per cent growth it projected for 2025 suggests the global economy may be closer to a more sustainable rate of growth as pandemic-related headwinds fade and monetary policy starts to normalise.

The modest upgrade to the 2024 forecast was mainly the result of a brighter outlook for growth among mature economies where the think tank’s projections increased to 1.4 per cent from 1.1 per cent in January.

The biggest change in growth expectations stemmed from the United States where The Conference Board now anticipates real GDP growth of 1.9 per cent this year instead of 1.4 per cent as negative real GDP growth mid-year is less likely.

A recession is no longer expected in the United States in mid-2024, yet consumer spending is expected to cool and overall GDP growth to slow to a pace between 0 per cent and 1 per cent over the second and third quarters this year.

Forecasts for the euro area inched down by a tenth, mainly due to small downgrades in the outlook for France and the Netherlands. For Europe as a whole, the modestly weaker euro area forecasts were more than offset by significant forecast upgrades for much of Eastern Europe.

Among the 20 euro area economies, nine suffered a full year contraction in 2023 including Germany, the Netherlands and Austria, while less-Russian-energy dependent Spain and Portugal continued to show much more robust growth, the think tank said in a release.

Its quarterly forecast trajectory anticipates improving growth conditions in the euro area starting in the second half of 2024.

In Taiwan, after a recession at the end of 2022 and the start of 2023, the economy rebounded very strongly with quarterly growth rates averaging 8 per cent for the remainder of 2023. That created a strong carry-over effect.

Even if there was zero growth in each of the four quarters in 2024, Taiwan’s average 2024 GDP level would still be 3 per cent more compared to last year’s. In fact, that was the main reason why the think tank’s 2024 forecast for Taiwan increased to 4.5 per cent from the 3.5 per cent projected in January.  

The think tank’s forecast for overall growth among emerging and developing economies was little changed this month. It is still looking for 4.4 per cent real GDP growth in 2023 followed by a modest slowdown to 3.9 per cent in 2024 and a pick-up to 4.1 per cent in 2025.

The main drivers for the downshift this year are China and India, while growth forecasts for the other major emerging and developing countries were largely unchanged.

For the developing Asian economies barring China and India, it expects growth to gradually accelerate from 4 per cent in 2023 to 4.3 per cent in 2024 and 4.6 per cent in 2025.

Latin America is expected to see slower growth this year, largely due to an anticipated stall in the United States in the second and third quarters this year.

The think tank is also looking for an improving growth trend in the Middle East & North Africa region and in Sub-Saharan Africa. 

The China growth forecast was left unchanged again this month, expecting a meaningful downshift in the pace of the expansion from last year’s 5.2 per cent rate to 4.1 per cent this year and to 3.9 per cent in 2025.

Confidence among China’s consumers remains extremely low, having yet to show a meaningful recovery from the second lockdown in 2022 and the still evolving property crisis, the think tank added.

Fibre2Fashion News Desk (DS)