GDP Growth Projections
Global real GDP is expected to grow 2.8% in 2023, following another quarterly upward revision for the year.
The US fuelled global economic performance with consumer spending and business investments remaining resilient despite rapidly rising interest rates. Sustained levels of consumption and activity in the services sector across markets also helped momentum.
Quarterly GDP Projections for 2023
Q1 Update
2.3%
Q2 Update
2.5%
Q3 Update
2.6%
Q4 Update
2.8%
Source: Euromonitor International Macro Model
Conversely, the Eurozone remained stagnant as weak foreign demand impacted manufacturers, and the ongoing real estate sector crisis in China continues to weaken business and consumer confidence.
The global economy in 2024 is expected to slow even further. The latest data puts GDP growth at 2.7% this year—a downward revision of 0.2 percentage points based on Q4 2023 forecasts. Restrictive monetary policy will slow consumer spending and business investments, which has negative residual effects on labour markets, the services sector and manufacturing.
The diverging growth trend between advanced and emerging economies widens in 2024. Advanced economies are expected to register 1.1% GDP growth—down from 1.4% in 2023—while emerging economies remain stable at 4.0%.
Asia Pacific continues to drive global economic prospects despite challenges in China. India is expected to be the fastest-growing major economy in 2024 at 6.1%. Vietnam, the Philippines and Indonesia are also contributing to strong regional performance, growing more than 5.0% each this year.
Companies should brace for a second consecutive year of global economic slowdown with regained momentum expected in 2025.
Advanced Economies: Real GDP Annual Growth Forecasts and Revisions from Last Quarter
Source: Euromonitor International Macro Model
Note: Data from 2023 onwards are forecasts, updated 5 October 2023. Annual growth rates in percentages. Revisions in percentage points
Emerging Economies: Real GDP Annual Growth Forecasts and Revisions from Last Quarter
Source: Euromonitor International Macro Model
Note: Data from 2023 onwards are forecasts, updated 5 October 2023. Annual growth rates in percentages. Revisions in percentage points.
Inflation Forecasts
Global inflation decelerates to 6.9% in 2023 based on Q4 projections—a downward revision of 0.1 percentage point from Q3. Lower commodity prices, especially energy, helped ease inflationary pressures.
In 2024, global inflation moderates to 4.9% as high interest rates and tighter credit conditions affect economic activity and reduce inflationary demand pressures.
Quarterly Inflation Forecasts for 2023
Q1 Update
6.8%
Q2 Update
6.9%
Q3 Update
7.0%
Q4 Update
6.9%
Source: Euromonitor International Macro Model
Inflation will decline faster in advanced economies compared to emerging countries this year. Developing markets have a higher vulnerability to commodity price shocks, which lead to persistent price pressures.
Businesses need to be aware of numerous drivers that impact inflation rates in the year ahead, especially on the supply side.
The global economy faces several geopolitical events, including the Israel-Hamas war, with potentially major implications for commodity markets. Should these escalate, impacting energy and food supply, the risk of a global inflation resurgence rises considerably.
Advanced Economies: Annual Inflation Forecasts and Revisions from Last Quarter
Source: Euromonitor International Macro Model
Note: Data from 2023 onwards are forecasts, updated 5 October 2023. Annual growth rates in percentages. Revisions in percentage points.
Emerging Economies: Annual Inflation Forecasts and Revisions from Last Quarter
Source: Euromonitor International Macro Model
Note: Data from 2023 onwards are forecasts, updated 5 October 2023. Annual growth rates in percentages. Revisions in percentage points.