Global economy grows above forecast, US outpaces developed markets

Investment bank Goldman Sachs believes that the global economy will grow faster than expected in 2024 thanks to strong income growth.

Goldman Sachs forecasts global economic growth of 2.6% next year. (Source: Visual Capitalist)

The bank said the global economy would grow 2.6% next year - above the 2.1% forecast by analysts surveyed by Bloomberg.

The US economy is expected to continue to outpace other developed markets, with 2.1%.

Goldman Sachs also believes that tight monetary and fiscal policies are almost no longer causing obstacles.

Goldman Sachs chief economist Jan Hatzius said fiscal policy and rising interest rates continued to weigh on growth across economies, but the worst of the impact had passed.

To control inflation, the US Federal Reserve (Fed) began tightening monetary policy in March 2022, when inflation rose to a 40-year high. Policymakers in developed markets are unlikely to cut interest rates before the second half of 2024, unless economic growth slows more than expected.

"Inflation continues to cool in emerging market and G10 economies and is expected to decline further," Goldman Sachs stressed.

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