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11 July 2024 / Brief
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Copy LinkThe Conference Board's real GDP forecast for the Global Economy was unchanged in July. We continue to project 3.1% year-over-year growth for 2024 and 3.2% year-over-year growth for 2025. Overall, we anticipate stabilization of global growth going forward, but future growth will be below the 3.5% average over the decade before the pandemic.
The US economy is expected to continue to lose momentum near-term as high prices and elevated interest rates sap domestic demand. Real GDP growth slowed dramatically to 1.4 percent quarterly annualized in Q1 2024 (from 3.4 percent in Q4 2023), and probably expanded at a clip not much faster than this in Q2. While we do not forecast a recession in 2024, we do expect consumer spending to cool further and real GDP growth to decelerate to around 2.1% for the full year (from 2.5% in 2023). However, GDP growth should pick up later this year as inflation subsides and the Fed first signals and then actually cuts interest rates. In 2025, 2-percent inflation and somewhat lower interest rates should levitate real GDP growth to near 2 percent. Nonetheless, the timing and pace of interest rate cuts remains uncertain and policy rates may ultimately land at levels exceeding the pre-pandemic average.
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