Fitch improves global GDP growth forecast for 2024

Fitch Ratings has improved its forecast for global GDP growth in 2023 to 2.9% from 2.5% expected in September, Report informs referring to Interfax.

The growth estimate in 2024 has been increased to 2.1% from 1.9%.

“World growth has held up in 2023, driven by a normalization of consumption in China and a pick-up in US growth, which have outweighed a sharp slowdown in Europe following the regional energy shock in 2022. However, with the full impact of recent monetary tightening still to be felt, China’s property slump continuing, and the eurozone stagnating, Fitch Ratings expects world growth in 2024 to fall sharply to 2.1%,” reads an updated Global Economic Outlook.

“For 2023, Fitch has raised its world growth forecast by 0.4pp compared to September’s Global Economic Outlook (GEO), with the US up by 0.4pp to 2.4% and China by 0.5pp to 5.3%. Our 2024 world growth forecast is 0.2pp higher, with a 0.9pp increase in the US to 1.2% (with recession now avoided) outweighing a 0.4pp cut to eurozone growth to 0.7%.”

Fitch analysts expect another rate hike by the Federal Reserve in January 2024. Next, the Fed is expected to pause until July and then cut rates by 100 basis points by the end of next year.

The European Central Bank will begin cutting interest rates in April, and by the end of 2024 it will decrease by 75 bp. At the same time, the Bank of Japan, on the contrary, will begin raising rates next year.