Insights

We now expect global GDP growth of 3.1% this year (unchanged from 2023) and 3.2% in 2025, an improvement from our earlier forecasts of 2.9% and 3.1%. While we upgrade our US growth forecast for 2024, we continue to expect below-trend growth in 2025. Asia is set to remain the primary engine of global growth, and we expect Africa and MENAP to grow faster in 2024 than in 2023. That said, key elections in multiple countries this year may temporarily weigh on investment activity. The US election in particular could have consequences for global trade in 2025. Major central banks are likely to start their rate-cutting cycles in the coming months, opening the door for Q3 policy easing by central banks in Asia. But decisions on the timing and pace of rate cuts remain challenging given lingering inflation concerns. While inflation has moderated over the past year, domestic price pressures are still a concern given strong labour markets and sticky wages in many economies. China continues to export disinflation, but global goods prices remain vulnerable to periodic supply-chain disruptions. A ramp-up of trade protectionism could add to costs.

Major central banks are likely to start their rate-cutting cycles in the coming months, opening the door for Q3 policy easing by central banks in Asia. But decisions on the timing and pace of rate cuts remain challenging given lingering inflation concerns. While inflation has moderated over the past year, domestic price pressures are still a concern given strong labour markets and sticky wages in many economies. China continues to export disinflation, but global goods prices remain vulnerable to periodic supply-chain disruptions. A ramp-up of trade protectionism could add to costs.