S&P Global’s April 15, 2024, Economic Outlook revised its global GDP forecast upward to 2.6% for 2024, up from previous estimates, signaling a shift from earlier caution to sustained growth. The upgrade was driven by a broad-based increase in global Purchasing Managers’ Index (PMI) readings and improving trade conditions despite ongoing cautious sentiment across regions.
According to the report by Ken Wattret of S&P Global Market Intelligence, quarterly global real GDP growth is expected to accelerate from 0.5% in the second half of 2023 to around 0.7% across 2024. Composite global output PMI crossed the 50‑point expansion threshold in February and March—the first time since mid‑2022—suggesting coordinated recovery in services and manufacturing. Notably, emerging economies led the rebound, with India posting its second-fastest expansion since 2010 .
The revival in export orders reflected in the PMI data points to strengthening trade dynamics, with no significant disruptions in supply chains affecting shipping routes. Core goods inflation within Group of Five economies fell to just 0.7% in February 2024—the lowest since December 2020 and significantly below pandemic-era peaks—though services inflation remained elevated around 4.8% . S&P’s global consumer price inflation forecast holds steady at 4.8% for 2024, even as some economies in North America and Europe experienced upward revisions .
Monetary policy projections have been adjusted alongside the growth upgrade. The April Outlook anticipates only modest interest rate cuts by the Fed—less than 50 basis points by year-end compared to earlier expectations of over 160 basis points—with the ECB likely initiating rate reductions around
S&P Global’s April 15, 2024, Economic Outlook revised its global GDP forecast upward to 2.6% for 2024, signaling a cautious but notable shift from the pessimism that defined earlier projections. The upgrade was largely attributed to a broad-based improvement in global Purchasing Managers’ Index (PMI) data and a rebound in international trade conditions. These trends point to a stabilization of the global economy despite lingering concerns over inflation, geopolitical tensions, and monetary tightening.
The latest PMI readings, which measure business activity across manufacturing and services sectors, showed expansion in February and March for the first time since mid-2022. This coordinated upswing was especially evident in emerging markets, with countries like India leading the way. India, in particular, reported one of its strongest growth periods since 2010, driven by resilient domestic demand and a gradual recovery in export performance. Meanwhile, trade activity across advanced economies also improved, aided by easing supply chain pressures and a more predictable regulatory environment.
The improved economic conditions were not without caveats. Core inflation in goods within the world’s largest economies dropped significantly, reaching levels not seen since 2020. However, services inflation remained stubbornly high, hovering around 4.8%. This divergence suggests that while goods-related sectors have normalized, services—including housing, healthcare, and transportation—are still experiencing inflationary pressures. S&P Global projects global consumer price inflation to average 4.8% in 2024, a figure that reflects persistent price stickiness in developed economies.
On the monetary policy front, expectations have shifted toward a slower pace of interest rate reductions. While initial forecasts anticipated aggressive rate cuts by central banks in the United States and Europe, the improved economic performance has reduced the urgency for monetary easing. The Federal Reserve is now projected to cut rates by less than 50 basis points in 2024, a sharp revision from earlier expectations of over 160 basis points. The European Central Bank is expected to begin easing around mid-year but in a more measured fashion.
Labor markets, particularly in the United States and parts of Western Europe, have remained robust despite higher borrowing costs. Employment growth has continued, supporting consumer spending and providing a buffer against economic shocks. Meanwhile, corporate earnings reports in the first quarter of 2024 have been mixed, with tech and energy sectors showing resilience while consumer discretionary firms report margin pressures.
The outlook also noted risks tied to geopolitical developments, especially ongoing tensions in Eastern Europe and the Middle East, as well as uncertainties surrounding China’s post-COVID growth trajectory. While Beijing has introduced a series of stimulus measures aimed at stabilizing property markets and boosting consumer confidence, long-term concerns about debt sustainability and demographic shifts remain.
Financial markets have responded cautiously to the improved outlook. Global equity indices have climbed modestly since the beginning of the year, while bond yields have adjusted upward to reflect tempered expectations for interest rate cuts. Investor sentiment, while improved, remains sensitive to incoming economic data and central bank communications.
Overall, S&P Global’s revised forecast represents a notable, if fragile, pivot from gloom to guarded optimism. The shift underscores how a confluence of stabilizing factors—resilient consumption, moderating inflation, and improved business activity—can reshape expectations even amid a complex and risk-laden global environment.
