Fitch raises global economic growth forecast for 2024

Fitch Ratings, the international credit rating agency, has slightly revised its global economic growth forecast for 2024, raising it from 2.6 percent to 2.7 percent. Azernews reports that this update is included in Fitch's September issue of the "Global Economic Forecasts Report."

The report highlights that global economic growth is expected to follow a historical trend, reaching 2.7 percent this year. This figure is 0.1 percentage points higher than the June forecast, driven by upward revisions in the economic growth projections for the United States, Great Britain, Brazil, and Russia.

Looking ahead, global economic growth is projected to decline to 2.5 percent in 2025 and 2.4 percent in 2026. This anticipated slowdown is largely attributed to the expected deceleration of the U.S. economy in the coming years.

"The Fed's easy monetary policy cycle is finally about to begin, but interest rates will remain restrictive next year, and the impact of interest rate cuts on economic growth will be small," the report noted.

The report also highlighted the following:

• China: Economic growth in China is forecasted to slow down next year due to a decline in export growth rates. China's economy is expected to grow by 4.8 percent in 2024 and 4.5 percent in 2025.
• Eurozone: Economic growth in the Eurozone is anticipated to recover next year, with growth projected at 0.8 percent in 2024 and 1.5 percent in 2025.
• United States: The U.S. growth forecast for 2024 has been revised upward from 2.1 percent to 2.5 percent. The economy is projected to grow by 1.6 percent in both 2025 and 2026. The report also emphasized that service inflation in the United States remains high, and the Fed's monetary policy easing period will be milder and slower than previous interest rate reduction periods.

The report further noted that unemployment has increased in the United States and other developed economies. However, this increase is due to a rise in labor supply rather than a decrease in labor demand.

"The latest data increases the Fed's confidence that inflation is on the way down. We expect interest rate cuts of 0.25 percentage points at the September and December meetings, followed by cuts of 1.25 percentage points in 2025 and 0.75 percentage points in 2026," the report stated.