In 2024, the global economy is expected to slow even further than last year. The latest data puts real GDP growth at 2.7%—unchanged from the Q4 2023 update and a 0.3 percentage-point decline compared to year-end 2023 performance.

Lagging effects from high interest rates and persistent cost pressures contribute to this deceleration. Economic conditions should gradually normalise in the second half of the year as inflation eases and monetary policy loosens, especially in major economies like the US and Eurozone, with regained momentum expected in 2025.

Major economies face distinct trajectories this year. Strong performance in the US last year fuelled momentum for 2024, resulting in a significant upward revision to real GDP growth from the Q4 2023 forecast. Yet, current projections point to a notable slowdown ahead compared to recent years due to higher interest rates. The Eurozone remains stagnant with slight recovery on the horizon as inflation moderates. The ongoing real-estate sector crisis in China continues to weaken business and consumer confidence, negatively impacting the market’s outlook.

The diverging growth trend between advanced and emerging economies continues in 2024. Advanced economies are expected to record 1.3% real GDP growth—an upward revision of 0.2 percentage points from Q4 2023—while emerging economies outperform at 3.9%.

Asia Pacific continues to drive global economic prospects despite challenges in China. India remains the fastest-growing major economy in 2024 at 6.1% based on Q1 projections. Vietnam and the Philippines are also contributing to strong regional performance, growing more than 5.0% each this year.