The global economy demonstrated unexpected resilience in 2023, despite high inflation and stricter monetary policies in most economies, leading to a third consecutive upward revision of real GDP growth to 2.8%.

This was primarily driven by the surprising strength of the U.S. economy. However, for 2024, global growth expectations have decreased and are now lower than those for 2023, at 2.7%.

This occurs as the expected restrictive monetary policy is anticipated to slow momentum in the services sector and labor markets in advanced economies, amid already weak production and global trade.

Major economies will face various challenges and a weak growth environment in 2024

The U.S. continued to outperform in 2023, driven by resilient consumer spending and labor market strength. In contrast, the eurozone stagnated, especially as weak external demand affected production.

However, in 2024, the eurozone is expected to modestly rebound, while the U.S. will significantly slow down, as the impact of restrictive monetary policy will eventually dampen the labor market and slow consumer spending.

China will continue to grapple with its troubled real estate sector and remain below potential in 2024, amidst weak business and consumer confidence, experiencing a slowed growth from 5% in 2023 to 4.7%.

The Asia Pacific will lead among resilient developing economies

The divergent trend between advanced and developing economies observed in 2023 will further extend in 2024, as the growth of advanced economies is expected to slow to 1.1%, down from 1.4% in 2023, while the growth of developing economies will remain steady at 4.0% in 2024.

In this context, the Asia Pacific region will remain the primary source of global growth, driven particularly by acceleration in Vietnam (6.0%), the Philippines (5.7%), and Indonesia (5.1%) in 2024, plus India, the fastest-growing major economy in 2024, with an estimated growth of 6.1%.