International credit ratings agency Fitch Ratings has reported in the June issue of its global macroeconomic outlook report that it has raised its 2024 global GDP growth forecast from 2.4 percent (March forecast) to 2.6 percent. The upward revision reflects that the confidence in the prospects of a European recovery improves, China’s export sector revives and domestic demand in emerging markets excluding China shows stronger momentum.
Fitch Ratings said that the US economy is slowing but only gradually, therefore the 2024 growth forecast for the US is unchanged at 2.1 percent. Central banks are now pivoting to monetary policy easing, with the ECB recently cutting rates, and the US Federal Reserve and the Bank of England expected to follow suit in the third quarter. However, the agency observes that inflation continues to be surprisingly persistent and global rates are now expected to decline at a shallower pace over the next 12-18 months.
Accordingly, Eurozone growth has been revised up by 0.2 percentage points to 0.8 percent and Fitch has raised China’s growth to 4.8 percent from 4.5 percent. Meanwhile India’s growth forecast has been revised up to 7.2 percent.
For 2025, Fitch Ratings expects world growth to edge down to 2.4 percent as the US slows to a below-trend rate of 1.5 percent, but the eurozone picks up to 1.5 percent. China’s growth is also expected to slow to 4.5 percent next year.