Macroeconomic Outlook Report: Global (Q4 2024 Update)

Macroeconomic Outlook Report: Global (Q4 2024 Update)

Summary

In its Q4 2024 update, GlobalData maintained its global economic growth forecast for 2024 at 2.52%, but reduced the 2025 projection by 0.06 percentage points to 2.54% from Q3 2024 estimates. The 2025 revision reflects escalating geopolitical tensions and potential supply disruptions, which could exacerbate inflationary pressures over time. For 2024, growth projections were up 0.12 percentage points for the Americas and 0.02 percentage points for Europe, but down 0.06 percentage points for Asia-Pacific and 0.29 percentage points for the Middle East & Africa.

Global inflation is projected to ease to 3.6% by 2025, down from 4.4% in 2024 and 5.8% in 2023. In 2024, inflation rates are expected to decline across all regions: the Americas (excluding Argentina and Venezuela) to 5.0% from 7.5% in 2023, Asia-Pacific to 4.5% from 6.8%, Europe to 4.2% from 7.8%, and the Middle East and Africa to 24.8% from 25.8%.

The 2024 global election cycle is marked by significant political changes, with gains by the far-right in Europe, victory of the liberal opposition in South Korea, and the Labour Party ending the UK’s Conservative rule. In India and South Africa, ruling parties retained power with declining support. The recent elections have been marked by low voter turnout, indicating political instability in several countries. In the US, Donald Trump defeated Kamala Harris, signaling a change and supporting his “America First” doctrine, which highlights isolationism, protectionism, and military strength over international cooperation.

Key Highlights

• As of November 2024, 10 of the 11 G10 nations have begun rate cuts amid easing inflation and changing economic conditions. Switzerland’s SNB reduced rates by 75 basis points (bps) to 1% in September 2024, while Canada’s BoC implemented its fourth consecutive cut on October 23, 2024, lowering rates to 3.75%. Sweden’s Riksbank made four cuts, bringing rates to 2.75% by November 2024. The ECB trimmed rates thrice in 2024, targeting neutrality by 2025. The US Fed cut rates twice, totaling 75 bps by November, and the UK’s BoE reduced rates twice, reaching 4.75% in November 2024.
• Business confidence declined across major regions between January and October 2024 compared to the corresponding period of the previous year. In contrast, consumer confidence improved, indicating a divergence in sentiment: businesses are more cautious due to global uncertainties, while consumers remain optimistic. This shift could support continued consumption despite broader economic challenges.

Scope

• GlobalData's Global Macroeconomic Outlook Report identifies, analyzes, and forecasts key development of the global economy. The report provides a 360-degree view of the economy which can be used as a strategic tool to understand market dynamics, business potential and direction of operations.

Reasons to Buy

• Comprehensive Insights: Offers a detailed analysis of global economic trends, including growth projections, inflation, and policy shifts across major regions and countries.
• Data-Driven Forecasts: Includes robust data on economic performance indicators, helping businesses and investors make informed decisions for 2024 and beyond.
• Regional Comparisons: Provides comparative analysis of economic prospects across the Americas, Europe, APAC, and MEA
• Expert Analysis: Features expert commentary on key factors shaping the global economy, such as geopolitical developments, trade dynamics, and fiscal policies.