Summary
The global economy is expected to grow at a consistent but below-trend rate for the next several quarters, according to the World Economic Outlook from the International Monetary Fund. The world economy is expected to expand 3.2% in 2024 and in 2025. Though solid, these rates are below long-term historical global growth rate of 3.8%, due to the impact of inflation and high interest rates. For industrialized economies (U.S., Europe, Japan, etc.), growth is forecast at a low 1.7% in 2024, followed by 1.8% in 2025. Among the regions, the U.S. economy is expected to grow the fastest next year, at 2.2%, while Japan’s forecast is for 1.1% and Europe is estimated at 1.2%. For emerging economies (China, India, Russia, Brazil, Saudi Arabia, etc.), growth forecasts call for 4.3% in 2024 and 4.2% in 2025. The leaders are expected to be India and China, with average growth for the two years of 6.8% and 4.7%, respectively. These nations have different drivers: population growth in India, which points toward commodity and industrial-based infrastructure products; and productivity growth in China, which suggests spending on healthcare, technology and financial services.
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