MILLIRE ENG2024

In its January update of the World Economic Outlook, the IMF estimated global growth to have reached 3.2% for 2024 and projected a modest acceleration to 3.3% in both 2025 and 2026, remaining below the 2000–2019 average of 3.7%. Heightened geopolitical uncertainty, a resurgence of protectionist trade measures, potential setbacks in disinflation due to economic policy dynamics, and the prolonged stagnation in China’s real estate sector are considered as downward risks to global growth. In 2024, global inflation showed signs of easing, reflecting the lagged impact of monetary policy. However, inflationary risks persisted due to continued volatility in commodity prices and transportation costs. The rigidity in expectations has limited the improvement in core inflation, while the persistently high level of services inflation has drawn attention. Headline consumer inflation in the United States declined from 3.4% at the end of 2023 to 2.9% as of December 2024. In the Euro Area, annual inflation eased from 2.9% at the end of 2023 to 2.4% as of December 2024. Global consumer inflation, estimated to have averaged 5.7% in 2024, is projected to decline to 4.2% in 2025. Advanced economies are expected to converge toward their inflation targets more rapidly than emerging market economies. In this context, the IMF forecasts inflation to fall to 2.1% in advanced economies and to 5.6% in emerging markets by the end of 2025. As inflation gradually moderated across many economies in 2024 and convergence toward targets began, central banks in advanced economies shifted toward interest rate cuts. The U.S. Federal Reserve (Fed) initiated rate cuts in September 2024, ultimately reducing the policy rate by a cumulative 100 basis points to the 4.25–4.50% range by the end of 2024. In the September projections, Federal Reserve officials anticipated four 25-basis-point rate cuts in 2025. However, due to growing uncertainty regarding the inflation outlook, this forecast was revised down to two cuts in the December meeting. The cautious stance of the Fed members reflected in the minutes of the meeting and its projections have led to the baseline scenario in the markets that the pace of interest rate cuts will slow down in 2025. The European Central Bank (ECB) lowered its deposit facility rate by a total of 100 basis points in 2024, bringing it down to 3%. The macroeconomic projections announced by the ECB following its December meeting signaled that interest rate cuts will continue gradually in 2025. The IMF stated that uncertainties surrounding the global economy could jeopardize the monetary easing process of major central banks, and emphasized the significance of structural reforms and fostering multilateral cooperation among countries to prevent this. Economic Outlook 2022 2022 2022 5.6 364 254 2023 2023 2023 4.5 362 256 2024 2024 2024 3.2 344 262 GDP Growth Rate – Based On Current Prices (%) Imports (USD billion) Exports (USD billion) 50 MİLLİ RE