The global economic outlook

The global economic outlook for the remainder of 2024 and into 2025 presents a mixed picture, with several factors shaping the trajectory of growth, inflation, and market performance.

1. Global Growth Slowdown:
   The International Monetary Fund (IMF) has projected slower global growth in 2024, with estimates of around 2.9%—a decline from previous years. The slowdown is largely attributed to ongoing geopolitical tensions, such as the Russia-Ukraine war and the conflict in the Middle East, which have caused disruptions in global trade and energy markets. Supply chain constraints, particularly in Europe, and weakened demand in China are also contributing to this slower growth.

2. Inflation and Central Bank Policies:
   Inflation remains a key concern, although it is showing signs of easing in many advanced economies. Central banks, including the U.S. Federal Reserve and the European Central Bank, have adopted tighter monetary policies over the past year to combat inflation. The rising interest rates are aimed at curbing inflation but have raised concerns about stifling economic growth, especially in emerging markets that are more vulnerable to higher borrowing costs.

3. China’s Struggles:
   China, once a major engine of global growth, is facing significant economic headwinds. Slower-than-expected post-pandemic recovery, a crisis in its property market, and weak domestic consumption have led analysts to revise down the country’s growth forecasts. While Beijing has introduced stimulus measures, they have yet to fully restore investor confidence.

4. Energy and Commodity Markets:
   Oil prices have surged amid geopolitical instability in the Middle East, leading to inflationary pressures globally, especially in energy-dependent regions. OPEC+ decisions to maintain production cuts have further added to the upward pressure on oil prices. Rising energy costs have created additional challenges for businesses and consumers worldwide, increasing operational costs and reducing disposable income.

5. Emerging Markets:
   Many emerging markets are grappling with high debt levels, currency volatility, and tighter global financial conditions. Countries dependent on commodity exports are particularly exposed to fluctuating prices. However, some regions, like Southeast Asia and parts of Latin America, are showing resilience, driven by strong domestic demand and diversification of trade partners.

6. Long-Term Structural Issues:
   Despite the near-term challenges, the global economy is expected to benefit from long-term trends, including digital transformation, green energy investments, and infrastructure development. However, these transitions will take time to fully materialize and will require significant capital investment, as well as stable policy environments.

Overall, while the global economy remains resilient, key risks—such as persistent inflation, geopolitical instability, and China’s uncertain recovery—are likely to weigh on growth prospects into 2025