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
The global economy is experiencing critical economic challenges as growth is projected to slow to 2.6% in 2024 which is just above the recession threshold of 2.5%. This marks the third consecutive year of subpar growth compared to the pre-pandemic average of 3.2%.
Is the world economy going to recession in 2024? ›
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 growth forecast 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.
What is the economic growth rate in the US in 2024? ›
The U.S. economy continues to grow at a solid pace. Adjusted for inflation, GDP was reported to have increased at a 1.6 percent annual rate in the first quarter of 2024. That was a moderation from a 3.4 percent expansion in the fourth quarter of last year.
What is the economic outlook for May 2024? ›
Recent signals point to an uptick in economic activity and a firming of inflation persistence, leading Vanguard to increase its outlook for 2024 GDP growth, from 0.3% to 0.7%, and its outlook for year-end core inflation, from 2.6% to 2.8%.
Which country has the best economy in 2024? ›
Which countries are in the recession 2024 list? ›
Contrary To Proverbial Wisdom War Is Bad For Business
| Country | 2020 | 2024 |
|---|
| Finland | -2.355 | 0.422 |
| Austria | -6.633 | 0.435 |
| United Kingdom | -10.36 | 0.46 |
| Equatorial Guinea | -4.788 | 0.467 |
63 more rowsMay 1, 2024
This statistic shows the projected top ten largest national economies in 2050. By 2050, China is forecasted to have a gross domestic product of over 58 trillion U.S. dollars.
Is the US in a recession? ›
US GDP has been rising over the last few years, barring a brief contraction in 2022, which the NEBR did not deem a recession. Republicans and independents are more likely to believe the US is currently experiencing a recession. The last recession was in 2020, during the global pandemic.
What is the world trade outlook for 2024? ›
World trade is picking up again
And the WTO projects world merchandise (goods) trade volumes to grow 2.6% and 3.3% in 2024 and 2025, respectively, after a significant decline last year.
Inflation has been falling recently and we expect it to continue falling and at a faster pace than in our November 2023 forecast over 2024 and 2025. Our central forecast sees CPI inflation at 2.2 per cent in 2024, 1.4 percentage points below the November 2023 profile.
What country has the highest GDP? ›
1. United States – Country GDP $25.43 trillion. A number of factors contribute to the success of the United States.
Is the US economy strong or weak? ›
"The U.S. economy continues to perform very, very well," Yellen said in an interview with Reuters, responding to the Commerce Department's report showing that U.S. gross domestic product grew at a 1.6% annualized rate last quarter.
What is the current state of the US economy? ›
How is the US economy doing? US gross domestic product (GDP) increased 1.9% in 2022 and another 2.5% in 2023. Year-over-year inflation — the rate at which consumer prices increase — was 3.1% in January 2023. The Federal Reserve raised interest rates 11 times in 2022 and four times in 2023.
What phase of the business cycle are we in 2024? ›
Nearly all major US manufacturing markets are also currently in Phase C, Slowing Growth, and most of them will face Phase D, Recession, this year – a handful are already in declining trends. However, some sectors, such as medical equipment and computers and electronics, are expected to avoid significant decline.
What is the outlook for JP Morgan in 2024? ›
In 2024, J.P. Morgan Research estimates 2–3% earnings growth for the S&P 500 and a price target of 4,200.
What is the outlook for the World Economic Forum in 2024? ›
The May 2024 Chief Economists Outlook launches amid a mood of cautious optimism about the global economy. Uncertainty persists, but signs of brightening are reflected in the latest survey, with a sharp fall in the share of chief economists expecting global conditions to weaken this year, from 56% in January to 17%.
Will the economy recover by 2026? ›
In 2025–2026, GDP growth will speed up thanks to a more rapid normalization of the business environment, to 5.3% and 4.5% respectively.
How long do recessions last? ›
According to the National Bureau of Economic Research (NBER), the average length of recessions since World War II has been approximately 11 months. But the exact length of a recession is difficult to predict. In general, a recession lasts anywhere from six to 18 months.
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.
