Global economic growth foreseen to rise this year supported by emerging markets: Fitch

Fitch Ratings raised its forecast for global economic growth in 2024 as confidence improved in European recovery prospects, China's export sector rebound, and higher potential momentum in domestic demand across emerging markets (excluding China).

GDP is expected to grow to 2.6% from 2.4% in March, the rating agency said. This represents a sharp rise in the growth rate of emerging markets (excluding China) at 3.7%, an increase of 0.5%, according to the latest World Economic Outlook.

The report highlighted that the economic growth rate in the Eurozone during 2024 was adjusted to 0.8% from 0.6%, while China’s expected growth rate increased this year to 4.8% from the previous 4.5%. Growth expectations in the United States remained stable at 2.1%.

The growth rate of the global economy is expected to decline to 2.4% in 2025, the report noted, adding that the growth in the US is likely to slow down to 1.5%. Growth in the Eurozone is to accelerate to 1.5%, while the growth in China will also decline to 4.5% next year due to the decrease in exports and government spending.

Fitch expects interest rates to fall at a slower pace to restricting-demand levels. It anticipates the European Central Bank reducing interest rates twice more this year, with the Federal Reserve starting to reduce borrowing costs in September and followed by another cut in December.