EIU maintains global GDP growth at 2.5%; India to become fastest growing major economy

The Economist Intelligence Unit (EIU) has maintained its global Gross Domestic Product (GDP) growth forecast of 2.5% for 2024.

It is however projecting a higher growth rate of 2.6% in 2025 and 2026 respectively.

According to its latest Global Outlook report, the US economy is outperforming change in real GDP.

“Resilient US economy, but uncertainty tied to elections”, it added.

“We have raised our forecast for US real GDP growth in 2024 to 2.4% (from 2.2% previously) following a strong second-quarter GDP print, but we continue to see evidence that the US economy is slowing, albeit remaining out of recession territory. Economic growth is now forecast to slow to 1.4% in 2025 (from 1.5% previously)”.

It however predicted a more difficult economic conditions in the euro zone leading to earlier rate cuts than in the US.

Meanwhile, India is forecast to be the fastest growing major economy in 2024-28.

Global Recession Risk is Low

Despite headwinds from conflict and high interest rates, the EIU said it do not believe that the global economy is at significant risk of recession over the next 12 months.

“US economic growth is slowing but remains firm, helped by strong household finances, a rising trend in manufacturing investment and its technology sector”, It said.

“Elsewhere, we expect momentum in Europe to build gradually, but for growth in China to remain sedate given constrained stimulus. Emerging markets will benefit from a rebound in global trade and firm commodities demand, even though they will face challenges from a strong US dollar and high debt-servicing costs. We expect global real GDP growth of 2.5% in 2024 (at market exchange rates), only marginally slower than the expansion of 2.6% in 2023”, it concluded.