World Economic Prospects
Each month Oxford Economics’ team of 300 economists updates our baseline forecast for 200 countries using our Global Economic Model, the only fully integrated economic forecasting framework of its kind. Below is a summary of our analysis on the latest economic developments, and headline forecasts. To access the full report (and much more), request a free trial today.
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Growth is beginning to regain momentum
- Recent news still supports our view that the worst has passed for the global economy. Even so, there remain solid reasons to believe that any pick-up in growth from here will be gradual. We’ve raised our global GDP growth forecast for 2024 by 0.1ppt to 2.5%. The forecast for 2025 is unchanged at 2.8%.
- Recent data from the US confirm that the resilience of last year was maintained into the early stages of 2024, so we continue to expect GDP growth will exceed the consensus expectation this year and have increased our forecast by 0.3ppts to 2.7%. On the face of it, this suggests growth is gaining pace this year, after GDP expanded by 2.5% in 2023. However, the calendar year figures are a little misleading – on a quarter-on-quarter annualised basis, our forecast assumes a slowdown in growth from the remarkably strong rates recorded in H2 2023.
- While the outlook for the US has become a little bit more favourable, our forecasts for GDP growth in 2024 in the eurozone and China remain little changed at 0.6% and 4.7%, respectively, which are subdued rates of growth by historical standards. However, easing inflation in the eurozone and fiscal support in China mean that both economies are in the midst of building a bit of growth momentum on a quarter-on-quarter basis.
- Inflation data in the US have continued to be a little stronger than expectations. Along with a small upward revision to the oil price forecast, this suggests inflation will ease gradually. We have pushed up our year-end forecast for the Brent oil price by $3 to $79 per barrel.
- We think the slow fall back in inflation, alongside the gradual slowdown in the underlying pace of economic activity, remain consistent with a slow pace of reduction in the Fed funds rate back towards neutral, rather than a reason to keep rates in the US unchanged for a prolonged period. We have also left our policy rate forecasts for other key advanced economies unchanged.
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