Growth will remain below pre-pandemic levels for the third year, highlighting the need for structural reforms and global collaboration to address trade disruptions, climate change, and rising inequalities.
UN Trade and Development (UNCTAD) forecasts global economic growth to slow to 2.6% in 2024, just above the 2.5% threshold commonly associated with a recession.
This marks the third consecutive year of growth below the pre-pandemic rate, which averaged 3.2% between 2015 and 2019.
A UN Trade and Development report released ahead of the 2024 Spring Meetings of the International Monetary Fund and the World Bank warns that the prevailing focus on inflation overshadows urgent issues like trade disruptions, climate change and rising inequalities.
It calls for structural reforms and coordinated global efforts, proposing a comprehensive strategy that includes both supply-side policies to boost investment and demand-side measures to improve employment and income.
Growth driven by consumption
The report highlights the global economy's growing reliance on private consumption, projected to increase by about 4%, outpacing total income growth (2.6%).
Historically, such increases in consumption have often relied on borrowing. With savings accumulated during the pandemic largely depleted to pre-2020 levels, debt is likely becoming a primary source of consumption.
This shift disproportionately benefits wealthier households with access to credit, exacerbating debt burdens for lower and middle-income groups and deepening economic inequalities.
Decline in workers’ share of income
Another worrying trend is that inequality in the labour market continues to rise post-pandemic, with workers in both developed and developing countries earning a reduced share of income.
This indicates that the benefits of economic growth are increasingly reaped by capital owners rather than by workers, widening wage and wealth gaps.
Regional economic outlooks
The report highlights an uneven post-pandemic recovery.
Africa: Projected to grow at 3.0% in 2024, up slightly from 2.9% in 2023. Armed conflicts and climate impacts pose significant challenges in several countries. The continent’s largest economies – Nigeria, Egypt and South Africa – are underperforming, affecting overall prospects.
South America: Economic growth is slowing, with Brazil expected to grow at 2.1%, hampered by external pressures and commodity dependence. Argentina faces a 3.7% contraction due to inflation and complex debt negotiations.
North America: Growth remains relatively resilient, though challenges continue. The United States is expected to grow at 2.0%, reflecting concerns over high household debt levels.
Asia: China targets around 5% growth in 2024, capitalizing on robust manufacturing and trade. India's economy is buoyed by strong public investment and service sector growth, with a forecasted expansion of 6.5% in 2024. Japan is expected to grow at 1.0% amid export demand challenges.
Europe: Major economies experience economic slowdowns, with France, Germany, and Italy projecting growth of 1.3%, 0.9%, and 0.8%, respectively, due to industrial and fiscal challenges.
Oceania: Economic growth in the region, particularly in Australia (1.4% growth projected in 2024), is expected to remain subdued, with the low-growth period extending into 2024.
FAQs
Data for 2024 is a forecast. UN Trade and Development (UNCTAD) forecasts global economic growth to slow to 2.6% in 2024, just above the 2.5% threshold commonly associated with a recession. This marks the third consecutive year of growth below the pre-pandemic rate, which averaged 3.2% between 2015 and 2019.
What is the global economic growth for 2024? ›
The global economy is continuing growing at a modest pace, according to the OECD's latest Economic Outlook. The Economic Outlook projects steady global GDP growth of 3.1% in 2024, the same as the 3.1% in 2023, followed by a slight pick-up to 3.2% in 2025.
Is the world economy going to recession in 2024? ›
After global growth exceeded expectations in 2023, businesses' perceived probability of a global recession has fallen substantially in 2024, according to Oxford Economics data. Oxford's global risk survey in January showed a recession probability of 7.2% — less than half of what it was in October 2023.
What is the economic growth rate in the US in 2024? ›
Gross Domestic Product, First Quarter 2024 (Second Estimate) and Corporate Profits (Preliminary) Real gross domestic product (GDP) increased at an annual rate of 1.3 percent in the first quarter of 2024, according to the "second" estimate. In the fourth quarter of 2023, real GDP increased 3.4 percent.
What is the economy prediction for 2024? ›
A slight acceleration for advanced economies—where growth is expected to rise from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025—will be offset by a modest slowdown in emerging market and developing economies from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025.
Who has the strongest economy in the world 2024? ›
United States Of America (U.S.A)
Although each recession has unique features, recessions often exhibit a number of common characteristics: They typically last about a year and often result in a significant output cost. In particular, a recession is usually associated with a decline of 2 percent in GDP.
What are the global issues in 2024? ›
Increased conflict in Africa, tensions and conflict in the Middle East and in Ukraine, medium-term climate change catastrophes, as well as calamities from inadequately controlled transformational artificial intelligence (AI) and other emerging technologies, may pose heightened risks in 2024.
When was the last global recession? ›
It is considered the most significant downturn since the Great Depression in the 1930s. The term “Great Recession” applies to both the U.S. recession, officially lasting from December 2007 to June 2009, and the ensuing global recession in 2009.
What is the globalization statistics for 2024? ›
Nonetheless, the World Trade Organisation (WTO) projects an optimistic outlook for 2024, anticipating a rebound in merchandise trade volume with a growth rate of 3.3%. This expected increase in trade volumes is set to outpace forecasted global GDP growth of 2.5%, signalling a positive shift in global trade dynamics.
In May 2024, prices had increased by 3.3 percent compared to May 2023 according to the 12-month percentage change in the consumer price index — the monthly inflation rate for goods and services in the United States. The data represents U.S. city averages.
Did the US economy grew at 1.6 percent annual rate in first quarter 2024 a sharp slowdown? ›
U.S. economy grew at 1.6 percent annual rate in first quarter 2024, a sharp slowdown. U.S. economic growth slowed in the first three months of the year, after more than a year and a half of rapid expansion — a welcome cool-off that nonetheless raises questions about how the rest of the year might shake out.
What is the economic outlook for the first quarter of 2024? ›
In 2024, the Fed expects economic growth to slow from 2023 but remain above the longer-run estimate of potential growth, in a range of 2% to 2.4%. The unemployment rate is expected to move up slightly from current levels to around 4% and inflation is expected to continue to make slow progress towards the 2% target.
What is the global trade forecast for 2024? ›
World trade is picking up again
Meanwhile, the IMF's latest World Economic Outlook puts world trade growth at 3% and 3.3% for 2024 and 2025, respectively, despite revising down its projections from earlier in the year.
Will the job market get better in 2024? ›
As you can see, the 2024 job market is expected to experience some positive shifts, however, there are a few industries that will need to stay on their toes in order to keep that competitive edge that will help them stay afloat. Job seekers in industries experiencing hiring declines will need to do the same.
Is Europe in recession in 2024? ›
Last week's data revealed that Europe's mild recession ended with the first quarter of 2024. Two back-to-back gross domestic product (GDP) declines of -0.1% in the third and fourth quarters of 2023 were followed by growth of +0.3% in the first quarter.
What will global inflation be in 2024? ›
According to the IMF, inflation is falling faster than expected in most regions: globally, it is expected to fall to 5.8% in 2024, with less than 50 countries where it will exceed last year's figures.
What is the most developed country in the world in 2024? ›
Most and Least Developed Countries in the World, 2024
| Rank | Country | GDP (USD million) |
|---|
| 1 | Switzerland | 905,684 |
| 2 | Norway | 546,768 |
| 3 | Iceland | 30,570 |
| 4 | Hong Kong (China) | 385,546 |
64 more rowsJan 22, 2024
