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Fitch Ratings upgrades global economic growth forecast for 2024
(MENAFN) Fitch Ratings has updated its global economic growth forecast for 2024, now projecting an expansion of 2.7 percent for the year, which represents an increase of 0.1 percentage points from the previous estimate made in June. The revised outlook reflects a more optimistic view of the global Economy for this year. However, the agency anticipates a slowdown in global GDP growth to 2.5 percent in 2025. This anticipated deceleration is attributed to expected reductions in US economic growth, which is forecasted to fall to 1.6 percent due to diminishing fiscal stimulus and a gradual decrease in consumer spending as household income growth slows.
In line with these adjustments, Fitch has also raised its growth forecast for the US economy for 2024 to 2.5 percent, up from the 2.1 percent projected earlier in June. For China, the forecasted economic growth for the coming year is set at 4.5 percent, a reduction from the 4.8 percent growth expected this year. This adjustment reflects an anticipated easing in the country’s rapid export growth. In contrast, the eurozone's growth outlook is more positive, with a projected recovery to 1.5 percent in 2025, up from 0.8 percent this year. This improvement is expected to be driven by a recovery in real wages, which has been weak since 2022 and is likely to support stronger consumption.
Regarding Türkiye, Fitch Ratings noted a significant deceleration in annual inflation as of August and expects it to decrease further to 43 percent by the end of the year. The agency has forecasted a 3.5 percent growth for the Turkish economy in 2024, with subsequent growth rates of 2.8 percent in 2025 and 3.7 percent in 2026. This revised outlook highlights a generally stable economic trajectory for Türkiye amidst broader global economic changes.
Fitch also commented on the anticipated easing of US Federal Reserve monetary policy, noting that the cycle of rate cuts expected to begin soon will be relatively moderate and cautious compared to previous easing cycles. The Fed’s careful approach is due to lingering inflation concerns from recent years. Fitch anticipates a 25 basis point reduction in rates during the Fed’s meetings in September and December, with additional cuts of 125 basis points in 2025 and 75 basis points in 2026. This forecast suggests a less aggressive easing cycle than most past episodes, reflecting the Fed's cautious stance in managing inflation and supporting economic growth.
In line with these adjustments, Fitch has also raised its growth forecast for the US economy for 2024 to 2.5 percent, up from the 2.1 percent projected earlier in June. For China, the forecasted economic growth for the coming year is set at 4.5 percent, a reduction from the 4.8 percent growth expected this year. This adjustment reflects an anticipated easing in the country’s rapid export growth. In contrast, the eurozone's growth outlook is more positive, with a projected recovery to 1.5 percent in 2025, up from 0.8 percent this year. This improvement is expected to be driven by a recovery in real wages, which has been weak since 2022 and is likely to support stronger consumption.
Regarding Türkiye, Fitch Ratings noted a significant deceleration in annual inflation as of August and expects it to decrease further to 43 percent by the end of the year. The agency has forecasted a 3.5 percent growth for the Turkish economy in 2024, with subsequent growth rates of 2.8 percent in 2025 and 3.7 percent in 2026. This revised outlook highlights a generally stable economic trajectory for Türkiye amidst broader global economic changes.
Fitch also commented on the anticipated easing of US Federal Reserve monetary policy, noting that the cycle of rate cuts expected to begin soon will be relatively moderate and cautious compared to previous easing cycles. The Fed’s careful approach is due to lingering inflation concerns from recent years. Fitch anticipates a 25 basis point reduction in rates during the Fed’s meetings in September and December, with additional cuts of 125 basis points in 2025 and 75 basis points in 2026. This forecast suggests a less aggressive easing cycle than most past episodes, reflecting the Fed's cautious stance in managing inflation and supporting economic growth.
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