Review of the World Economy in 2024 and Its Outlook:Navigating a Winding Path Along the Medium-Low Growth Trajectory

The world economy in 2024 proved surprisingly resilient despite multiple shocks. This resilience can largely be attributed to the effects of tight monetary policies and the strong performance of labor markets in major economies. Although a recession was narrowly avoided， the intensifying strategic rivalries among major powers， rising geopolitical risks， the resurgence of trade protectionism and sluggish global growth have all cast a shadow over the economic outlook.

Review of the World Economy in 2024

Overall， global economic growth in 2024 remained steady but slow， characterized by stable employment， declining inflation， and a modest recovery in trade and investment. Fiscal policies remained relatively loose across many countries， while major central banks began cutting interest rates， contributing to a significant rise in asset prices.

I. The Economy Navigated a Winding Path Along the Medium-Low Growth Trajectory

In 2024， the world economy recovered slowly amidst multiple challenges. Despite uncertainties brought by geopolitical tensions， fragmented trade and tight money policies of major economies， global economic growth remained stable. Major international institutions maintained a cautious and neutral outlook on the economic situation. In October 2024， the International Monetary Fund （IMF） projected that the world economy would grow by 3.2% in 2024， a 0.1 percentage point decrease from 2023， consistent with its July forecast. At state level， developed economies were expected to grow by 1.8% in 2024， 0.1 percentage point higher than in 2023. Among them， the U.S. and Japan were projected to grow by 2.8% and 0.3% respectively， down 0.1 and 1.4 percentage points from 2023. The Eurozone and the UK were expected to grow by 0.8% and 1.1% respectively， up 0.4 and 0.8 percentage points from 2023. Emerging markets and developing economies were projected to grow by 4.2%， a 0.2 percentage point decline from 2023. Among them， China and India were expected to grow by 4.8% and 7.0% respectively， down 0.5 and 1.2 percentage points from 2023. Russia’s growth rate was projected at 3.6%， unchanged from the previous year， while Brazil and South Africa were expected to grow by 3.0% and 1.1% respectively， up 0.1 and 0.4 percentage points from 2023.

II. Employment Remained Stable

The global employment situation in 2024 improved compared to 2023. However， the employment rates varied significantly across countries， and youth employment remained a pressing issue. In May 2024， the International Labour Organization （ILO） projected that the global unemployment rate would decline to 4.9% in 2024， down from 5.0% in 2023. Despite this， job opportunities remained scarce， with the global “jobs gap” （the number of people willing but unable to work） still standing at 402 million. Generally speaking， developed countries had low unemployment rates and tight labor markets， while most developing countries continued to face high unemployment rates. But when it comes to trends， unemployment rates in developed countries mostly showed an upward trajectory， whereas those in emerging markets and developing economies were largely on a downward trend. Additionally， youth unemployment remained high globally， a situation that is unlikely to improve in the near term. In August 2024， the ILO projected that the global youth （aged 15 to 24） unemployment rate would reach 12.8% in 2024， approximately 3.5 times that of adults aged 25 and over. Specifically， youth unemployment rates in lower-middle-income and upper-middle-income countries were 12.9% and 15.3% respectively.

III. Inflation Rates Further Declined

Global inflation rates continued to decline in 2024. The IMF expected global inflation in 2024 to average 5.9%， a 0.8 percentage point decrease from 2023. In developed economies， the inflation rate was 2.7%， down 1.9 percentage points from 2023. Data from the U.S. Department of Labor showed that in September 2024， the U.S. Consumer Price Index （CPI） increased by 2.4% year-on-year and 0.2% month-on-month. The core CPI （excluding food and energy） rose by 3.3% year-on-year， indicating a slowdown in overall inflation. According to Eurostat， inflation in the Eurozone cooled in September 2024， with the Harmonized Index of Consumer Prices （HICP） increasing by 1.7% year-on-year， dipping below the 2% target set by the European Central Bank for the first time since 2021. In contrast to the downward trends in the U.S. and Europe， Japan’s inflation rate showed a rebound. Data from Japan’s Ministry of Internal Affairs and Communications revealed that the core CPI （excluding fresh food） rose by 2.4% year-on-year in September 2024， marking the 37th consecutive month of increase. Similarly， inflation rates in emerging markets and developing economies continued to decline， reaching 7.9% in 2024， a 0.2 percentage point decrease from 2023. According to data from the national statistical bureaus of relevant countries， in September 2024， China， Brazil， India， Russia， and South Africa witnessed a year-on-year increase in the CPI of 0.4%， 4.4%， 5.49%， 8.6%， and 3.8% respectively.

IV. Leverage Ratio Declined but Disparities Among Countries Remained

Global debt continues to rise， but the overall leverage ratio （total debt to GDP ratio） has started to decline. At the same time， significant disparities among countries indicate that global debt risks are unevenly distributed. According to a report by the Institute of International Finance （IIF）， global debt reached $312 trillion in the second quarter of 2024， a modest increase of $2.1 trillion since the start of the year， far smaller than the $8.4 trillion rise seen in the same period the previous year. Although total debt is still rising， the global leverage ratio has started to decrease. In Q2 2024， the global leverage ratio stood at 328.4%， a decrease of 0.8 percentage points from the same period in 2023， signaling a downward trend in global debt risk. By sector， the decline in the global leverage ratio was mainly driven by the household and non-financial corporate sectors. In Q2 2024， these sectors’ leverage ratios were 90.6% and 40.9% respectively， down by 1.1 and 0.9 percentage points compared to the previous year. Looking at countries， the trends in leverage ratios were markedly different. In Q2 2024， the leverage ratio of major developed economies was 376.8%， a decrease of 3.9 percentage points from 2023， driven by factors such as high inflation and tight monetary policies. In contrast， major emerging markets saw an increase in their leverage ratios， reaching 245.2%， up by 4.4 percentage points from the previous year. This rise was largely due to higher external financing costs caused by tightening monetary policies in developed economies， as well as large-scale fiscal stimulus measures implemented by some countries.