RWI Konjunkturberichte

The global economy is growing only at a moderate pace. At the same time, there are clear regional differences. For example, the USA has so far recorded strong growth in economic output. In contrast, the European economy is rather weak, and the Chinese economy remains sluggish, not least due to the ongoing problems in the property sector. Global trade has also been weak. Inflation has already fallen significantly in most economies. The development of energy prices played a major role in this, but in the meantime also core inflation receded. However, the consequences of the loss of purchasing power due to price increases and the effects of the sharp interest rate hikes are likely to continue to curb private consumption and dampen investment activity before the economic activity regains momentum in the further course of the forecast period. After an expected expansion by 2.8% this year, the global economy’s growth rate is likely to slow down next year to only 2.3%. Somewhat stronger growth of 2.7% is then expected again in 2025. Inflation is likely to continue to decline gradual-ly and, after 4.7% in the current year, the weighted average for the countries analyzed should reach 3.3% and 2.8% in 2024 and 2025, respectively. The numerous risks to which the further development of the global economy is ex-posed include, not least, the effects of geopolitical conflicts. They give rise to ongo-ing uncertainty and could have a further impact on energy prices and trade flows, for example. Unexpected rises in energy prices could be one reason why the disinfla-tion process becomes slower and monetary policy would have to remain restrictive for longer than assumed in the forecast. This would dampen the economy even more and harbor further risks for financial stability and debt sustainability.

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