The Global Economy in 2024: Surprising Resilience and Persistent Challenges


In 2024, the world economy faces a mix of challenges and possibilities, with notable events in important economies. This summary highlights key findings from economic powerhouses China and the United States, along with the global economic implications outlined in the International Monetary Fund’s (IMF) World Economic Outlook Update (January 2024).

China Aims for 5% Economic Growth in 2024, Prioritizes Structural Transformation Amidst Challenges

China is confronting various challenges in the economic sphere, as the government has set a high growth rate target for 2024, aiming for approximately 5%. Premier Li Qiang announced this during the National People’s Congress (NPC), emphasizing the necessity to “transform the growth model,” overcome challenges posed by the property sector, deflationary pressures, foreign capital outflows, and a record-low birth rate.

Prime Minister Li Qiang underscored the paramount importance of stability as the foundation for all economic endeavors. The need for economic changes and improvements in growth was highlighted. However, investors in Hong Kong were disappointed by the lack of significant stimulus measures, leading to a 2.6% drop in the Hang Seng Index. Despite this setback, analysts remain optimistic that a 5% growth target can be achieved if more bold monetary easing measures are implemented. More precisely monetary easing measures are operations aimed at stimulating the economy such as reducing interest rates, increasing the monetary base and easing loan conditions.

Li Qiang acknowledged potential difficulties in achieving growth targets but attached great importance to policies aimed at increasing employment, incomes, and addressing any associated risks. Economic challenges in these sectors prompted China to commit to “stabilizing and expanding” consumption.

The government wants to keep economic growth steady by limiting its budget deficit to 3% of GDP in 2024. This is a cautious move that will help keep the country’s debt under control. China will sell special bonds worth 1 trillion yuan ($139 billion) to fund big projects. Local governments will also be able to sell 3.9 trillion yuan ($542 billion) of bonds for infrastructure projects.

However, doubts have emerged regarding achieving the growth objective without an increase in the fiscal deficit ratio. The emphasis on “high-quality development” aligns with China’s strategic goals, including a 10% increase in the annual budget for science and technology, reaching an unprecedented 370.8 billion yuan ($51.6 billion).

The Chinese government has reaffirmed its commitment to national defense, setting the growth rate of Chinese military spending at 7.2%, although lower than that of the United States and Russia. In response to China’s economic challenges, decisions made by the National People’s Congress (NPC) reflect a careful navigation between supporting economic growth and managing debt levels. This balancing act suggests that the country is prioritizing long-term stability and responsible development despite global economic uncertainties.

Resilient US Economy Challenges Expected Fed Rate Cuts in 2024 Amid Global Economic Struggles

Expectations of a Federal Reserve turnaround with rate cuts in 2024 are encountering growing skepticism as the U.S. economy displays resilience, contradicting projections of easing financial conditions. Initially, the market anticipated six rate cuts starting in March, but now Fed Chair Jerome Powell has cast doubt on that move, stating, “I don’t think it’s likely that the committee will reach a level of confidence by the time we meet in March to identify March as the right time to do so.” Some economists, including Torsten Slok, predict that the Federal Reserve (Fed) might not lower interest rates in 2024. Despite prolonged inflation and increased borrowing costs, the U.S. economy remains robust, with exceptionally low unemployment and persistent wage growth.

The persistence of inflation raises concerns for Americans, particularly regarding basic necessities. Experts predict a 2.4% GDP growth, higher than the 1.5% forecasted in November, which could lead to faster inflation. Additionally, the robust US economy, which grew 3.2% annually in the last quarter of 2023, contributes to the dollar’s strength. While some analysts expect a weaker dollar, its resilience defies these predictions.

While the U.S. seems to be winning the global economic battle, other countries face post-COVID-19 challenges, such as inflation and high interest rates. The U.S.’s solid growth is not solely attributed to its workforce and increased production rate due to substantial infrastructure investments. The struggles of other nations contribute to this, such as Japan’s declining population and low immigration rate, hindering potential economic growth. Additionally, many European countries are tied to Russian oil and natural gas, suffering consequences due to the Russia-Ukraine war.

Navigating the Complex Global Economic Landscape in 2024

While OECD indicators suggest a recovery in most economies, there appears to be a decline in consumer expectations. Inflation exhibited a mixed trend, with the United States experiencing an increase in the Consumer Price Index (CPI) to 3.4% in December, while core inflation decreased by 3.9%. In the Eurozone, overall inflation rose to 2.9%, with emerging economies like India contributing to the overall inflation increase, while Russian inflation spiked before moderating slightly.

According to the World Economic Outlook Update by the International Monetary Fund (IMF) held in January 2024, the global economy is deemed “surprisingly resilient.” Specifically, the IMF projects growth rates of 3.1% and 3.2% for 2024 and 2025, respectively.

This resilience is attributed, in particular, to the United States’ strong performance, robust showings in large emerging markets, developing economies, and fiscal support in China.


As we navigate the complexities of 2024, it is noted the dynamic nature of global markets. China’s ambitious growth goals, the US economic resilience challenging expected rate cuts, and the overall global economic landscape present a detailed picture that requires careful consideration for investors, policymakers, and businesses alike.

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