2024 Economic Forecast: Inflation, Recession, GDP Growth (2024)

FAQs

2024 Economic Forecast: Inflation, Recession, GDP Growth? ›

While we do not forecast a recession in 2024, we do expect consumer spending growth to cool and for overall GDP growth to slow to under 1% over Q2 and Q3 2024. Thereafter, inflation and interest rates should gradually normalize and quarterly annualized GDP growth should converge toward its potential of near 2% in 2025.

The Indian economy is expected to achieve “higher” than 7% growth in 2024-25, the National Council of Applied Economic Research (NCAER) on Monday said pointing at strong high-frequency indicators, an above normal monsoon forecast and a benign global outlook.

S&P Global Ratings expects U.S. real GDP growth of 2.5% in 2024 as the labor market remains sturdy. We continue to expect the economy to transition to slightly below-potential growth in the next couple of years.

We expect inflation to average 1.9% from 2024 to 2028—falling just under the Fed's 2.0% inflation target. If inflation proves stickier than expected, the Fed stands ready to do whatever's necessary—including inducing a recession—to bring inflation down to 2%.

Wall Street analysts' consensus estimates predict 3.6% earnings growth and 3.5% revenue growth for S&P 500 companies in the first quarter. Analysts project full-year S&P 500 earnings growth of 11.0% in 2024, but analysts are more optimistic about some market sectors than others.

In 2025, real GDP growth rises to 2.2 percent, supported by lower interest rates and improved financial conditions. (Unless this report indicates otherwise, annual growth rates are measured from the fourth quarter of one year to the fourth quarter of the next.)

According to Wang and Tyler, the economic data should "give more confidence that the US economy is recovering in additional sectors" and that "recession fears for 2024 are likely to be pushed into 2025."

After global growth exceeded expectations in 2023, businesses' perceived probability of a global recession has fallen substantially in 2024, according to Oxford Economics data. Oxford's global risk survey in January showed a recession probability of 7.2% — less than half of what it was in October 2023.

By far the largest economy to make the IMF's high growth projection list is India, the world's most populous country. Other Asian countries with strong growth prospects in 2024 include Mongolia (6.5%), Tajikistan (6.5%) and the Philippines (6.2%).

Will food prices go down in 2024? ›

The U.S. Department of Agriculture has released its forecast for 2024 that shows all food prices are expected to increase 2.5% while food-at-home prices are predicted to go up 1.6%. Between January and February, the Consumer Price Index for food at home rose just 0.1% and was still 1% higher than February 2023.

Overall, despite an expected slowdown in the coming quarters, we expect the US economy to post real growth of 2.4% this year and 1.4% in 2025. Over the entire forecast, economic growth averages 1.8% per year, slightly higher than the long-term potential of 1.5% per year.

The estimates from strategists put the median target for the S&P 500 at 5,200 by the end of 2024, implying a decline of less than 1% from Friday's level, according to MarketWatch calculations. Heading into 2024, the median target was around 5,000 (see table below).

The brokerage had previously forecast its year-end target at 4,625. Last month, HSBC and BofA Global Research projected that the index would end 2024 at 5,400, while Oppenheimer estimated 5,500. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter.

Steady but Slow: Resilience amid Divergence

The baseline forecast is for the world economy to continue growing at 3.2 percent during 2024 and 2025, at the same pace as in 2023.

₹24.99 lakh crore (US$310 billion) (2024-25 est.) 5.8% (2024-25est.) ₹79,396 (US$994) (2021-22 est.)

The International Monetary Fund (IMF) has recently increased its 2024 forecast for US GDP growth to 2.7% from 2.1% in its January outlook. The Q1 growth figure accompanies a cooling of US business activity in April, while inflation rates slowed slightly.