In Q1 2024, the global economy improves slightly from previous years marked by pandemic, Russia-Ukraine conflict, and US banking crisis. However, US activity slows down, with emerging countries driving growth. Global economic, social, and political risks persist, including the dissolution of the French National Assembly. Consequently, Coface adjusts assessments for 5 countries and 26 sectors, indicating short-term positive outlook only.
The world economy above the waterline
Our global growth forecast for 2024 has been upgraded to 2.5%, with stabilization expected at 2.7% in 2025. Moderate growth in the US and China should be offset by acceleration in several emerging countries.
Despite the slowdown in the US economy, labor market figures appear to have returned to pre-pandemic levels, indicating a better balance between labor supply and demand.
In China, the economic rebound remains uneven. GDP exceeded expectations in the first quarter of 2024, thanks to investment in manufacturing, exacerbating concerns about production overcapacity. Given the weakness of domestic demand, Chinese producers will have to find outlets on foreign markets. Persistent deflationary pressures could continue to hold backcorporate and household incomes.
Europe, with GDP growth of 0.3% in the first quarter of 2024, and activity set to pick up thanks to the services sector, seems to be out of recession.
More arduous disinflation
The slowdown in disinflation in the United States confirms that the last mile in the fight against inflation is indeed the most difficult. The cause lies in the persistently high prices of services, and housing. PCE1 inflation, which at 2.7% remains above the US Federal Reserve’s 2% target, confirms this point.
In Europe, inflation rebounded in May to 2.6%, after dropping to 2.4% in April thanks to a slowdown in unprocessed food and goods prices. While the likely rise…
