Accelerated growth to be expected next year

In Euromonitor International’s Q3 2023 baseline forecast, the 2023 global real GDP growth forecast is revised marginally upward to 2.6%.

Global economic growth is expected to accelerate in 2024 but remain subdued at 2.9%, mainly as result of the lagged effects of higher borrowing costs.

Global consumer price inflation is expected to decelerate to 7.0% in 2023 and further to 4.7% in 2024, on the back of slowing demand, tightened financial conditions and lower commodity prices.

Real GDP growth projections for 2023 were upgraded for most advanced economies in Euromonitor International’s Q3 2023 baseline forecasts, except for Germany. Although a rapidly tightening monetary policy has weighed on the housing, financial and manufacturing sectors, the weakness is offset by strength in the services sector.

Emerging and developing economies remain the growth engine of the global economy in 2023-2024, driven by rebounding domestic activity, increased investment and tourism, among other factors. Nevertheless, the outlook is mixed across markets and regions.

China’s economy is predicted to expand by 5.3% in real terms in 2023 and 4.8% in 2024, while its growth momentum is slowing as both domestic and foreign demand falter.

China’s official manufacturing Purchasing Managers’ Index (PMI) has stayed below the 50-point threshold since April 2023, indicating a contraction in factory activities, as demand for Chinese exports weakens. The ongoing real estate crisis and a looming deflation risk also weigh on the outlook for China, although an expected fiscal stimulus should help boost the economy.

Meanwhile, several emerging Asian economies continue to post solid growth in 2023, such as India (5.8%), the Philippines (5.6%) and Vietnam (5.5%), as they benefit from solid consumption and investment trends. The Gulf economies have also weathered the uncertain global economic environment relatively well.

On the other hand, the economic slowdown is more visible in Latin America, with the likes of Mexico and Brazil facing the pressures of weakening demand and lower commodity prices.