Allianz – Global Economic Outlook, 2024-2025

The Global Economic Outlook for 2024-25 predicts sluggish economic momentum with global GDP growth of less than 3%. Advanced economies are expected to grow by 1.6% in 2024, while emerging markets will slow down to 4%. The US and Europe are expected to narrow their growth performance gap in the second half of 2024. Global trade is recovering, but geopolitical tensions and inventory glut may limit the rebound in Chinese exports. Central bankers are expected to pivot in the summer, with the Fed delivering rate cuts and the ECB cutting rates before the Fed. The BoE is also expected to pivot in August. Major emerging markets will start a cautious cutting cycle to avoid disturbing portfolio flows. Fiscal consolidation in Europe could lower GDP growth by -1pp. The US election results in November will determine the course for fiscal, industrial trade, and monetary policy, potentially increasing transatlantic divergence.