Tanzania Investment and Consultant Group Ltd

| Economic Research Centre

Global inflation is projected to moderate to 3.5% in 2024, with a further decline to 2.8% by 2026, aligning with central bank targets. However, inflation remains elevated, especially in Emerging Market and Developing Economies (EMDEs), where it is expected to reach 4.0% in 2024 before easing to 3.5% by 2026. Persistent inflationary pressures are driven by high energy and food prices, geopolitical tensions, and supply chain disruptions. Core inflation, particularly in the services sector, remains stubborn, requiring cautious global monetary policies, with interest rates projected to stay elevated through 2026.

1. Global Inflation Trends

2. Regional Inflation Dynamics

3. Core Inflation

4. Factors Contributing to Persistent Inflation

5. Commodity Prices and Inflation

6. Monetary Policy and Inflation Control

7. Risks to Inflation

Key Figures:

Summary:

Source: The Global Economic Prospects June 2024 report

Global growth is projected to stabilize at 2.6% in 2024, with only a slight rise to 2.7% by 2026, falling below the pre-pandemic average of 3.1%. Advanced economies are expected to grow by 1.5% in 2024, while Emerging Markets and Developing Economies (EMDEs) will see 4.0% growth, driven by regions like South Asia, with India leading at 6.6%. Low-income countries are forecasted to grow by 5.0% in 2024. Key risks include geopolitical tensions, high interest rates, and debt stress, particularly for EMDEs, which may hinder recovery.

1. Global Growth Overview

2. Advanced Economies

3. Emerging Markets and Developing Economies (EMDEs)

4. Growth in Low-Income Countries (LICs)

5. Global Growth Risks

Key Takeaways:

Source: Global Economic Prospects June 2024 report

Global growth faces multiple risks, including geopolitical tensions, which may disrupt trade and raise energy prices beyond $84 per barrel in 2024. Trade fragmentation could slow expected trade growth to below 2.5%, while persistent inflation, projected at 3.5% in 2024, might force central banks to maintain high interest rates of around 4% through 2026, dampening investment. Additionally, 40% of EMDEs are at risk of debt distress, with tightening global financing further constraining growth. Climate-related disasters and slower growth in key economies, like China, also pose significant threats to recovery. Conversely, faster disinflation and stronger U.S. growth offer potential upside.

1. Geopolitical Tensions

2. Trade Fragmentation

3. Inflationary Pressures

4. Higher-for-Longer Interest Rates

5. Debt Vulnerability and Fiscal Stress

6. Climate-Related Natural Disasters

7. Slower Growth in Key Economies

8. Upside Risk: Faster Disinflation and Stronger Growth in the U.S.

Key Figures:

Summary of Risks to Global Growth:

Source: Global Economic Prospects June 2024 report

Global growth is projected to stabilize at 2.6% in 2024, rising to 2.7% by 2025-2026, which is slower than the pre-COVID average of 3.1%. Emerging Market and Developing Economies (EMDEs) are forecasted to grow at 4.0% in 2024, with Sub-Saharan Africa growing at 3.5%. Global inflation is expected to moderate to 3.5%, though it will remain above pre-pandemic levels, especially in EMDEs. Oil prices are set to average $84 per barrel in 2024, while non-energy commodity prices remain stable. Risks to growth include geopolitical tensions and high debt distress in 40% of EMDEs.

  1. Global Growth:
    • Global GDP growth is projected to stabilize at 2.6% in 2024, with an expected increase to 2.7% in 2025-2026. This growth is slower than the 3.1% average in the decade before COVID-19​.
    • By 2026, 80% of the world’s population will experience slower growth compared to pre-pandemic levels.
  2. Regional Growth:
    • Emerging Market and Developing Economies (EMDEs) are forecast to grow at 4.0% in 2024, down from 4.2% in 2023. China’s growth is expected to slow to 4.8% in 2024.
    • Sub-Saharan Africa is expected to grow at 3.5% in 2024, with a rise to 4.0% in 2026​.
  3. Global Inflation:
    • Inflation is projected to moderate to 3.5% globally in 2024, but it will remain higher than pre-pandemic levels​.
    • Inflation in EMDEs is expected to decline but will remain challenging for many regions due to commodity price fluctuations.
  4. Commodity Prices:
    • Oil prices are projected to be slightly higher in 2024, averaging $84 per barrel, but lower than 2023 prices​.
    • Prices for non-energy commodities are expected to remain stable​.
  5. Risks to Global Growth:
    • Escalating geopolitical tensions and trade fragmentation pose significant risks to global growth.
    • Debt distress risks remain high for 40% of EMDEs, with many economies vulnerable to shocks​.

Source: Global Economic Prospects June 2024 report

crossmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram