Global economic performance in 2024 showcased resilience despite persistent challenges. According to the International Monetary Fund (IMF), global growth remained stable but subdued, while the Organisation for Economic Co-operation and Development (OECD) highlighted risks such as inflation, geopolitical uncertainties, and economic disparities. As the year closes, the six largest economies—the United States, China, Japan, Germany, India, and the United Kingdom—offer a snapshot of the global economic landscape.
India’s Economic Resilience Shines
India, the world’s fifth-largest economy with a GDP of $3.89 trillion, demonstrated robust resilience in 2024. The World Bank projected a 7% growth rate for FY25, cementing India’s path to becoming the third-largest economy by 2030.
India’s strengths include significant foreign exchange reserves and record-breaking foreign direct investment (FDI) inflows, which bolster its global economic standing. However, inflation presented a challenge, reaching 6.21% in October due to rising food and fuel costs. Despite slower GDP growth, revised to 6.6% for FY25, India remains a key driver of global economic growth.
The United States Maintains Stability Amid Challenges
The United States, the world’s largest economy, showed stability despite grappling with inflation, high interest rates, and a cooling labor market. The IMF predicted that the US would outperform other G7 nations in 2024. Wage growth outpacing inflation supported household spending, while a Federal Reserve rate cut in September aimed to address labor market concerns.
However, challenges persisted, including high borrowing costs affecting housing and manufacturing. Inflation stalled at 2.8% in November, and manufacturing faced job cuts in durable goods production. The outlook remains cautiously optimistic as the US navigates ongoing economic pressures.
China Faces Slowdown Amid Structural Challenges
China’s economy grew by 4.8% in the first three quarters of 2024, but growth slowed in the latter half of the year due to weak domestic demand and a struggling property sector. Stimulus measures helped support short-term demand, but the World Bank revised China’s growth forecast to 4.9% for 2024, slowing further to 4.5% in 2025.
Structural challenges such as high developer debt, aging demographics, and weak household confidence constrained growth. Despite these issues, policy initiatives targeting rural-urban divides and income inequality aim to foster sustainable, consumption-driven growth.
Germany’s Economic Struggles Persist
Germany faced economic contraction for the second consecutive year, with the Bundesbank projecting a 0.2% decline in GDP for 2024. While modest growth of 0.1% in Q3 offered a glimmer of hope, weaknesses in trade and investment remained evident.
Inflation eased to 2.4% in October, down from 11.6% two years prior, thanks to lower energy prices. The government’s fiscal discipline reduced deficits to 2.2% of GDP. However, high energy costs and political uncertainty continued to weigh on economic performance, with limited growth forecasted for 2025.
Japan’s Modest Growth And Optimistic Outlook
Japan experienced modest growth in 2024, with the IMF revising its forecast to 0.3% due to automotive supply chain issues and diminishing benefits from tourism. Resilience in the manufacturing sector and a strong stock market performance highlighted areas of recovery.
Looking ahead, Japan expects a rebound in 2025 with projected growth of 1.1%, driven by rising wages and a tight labor market. The Bank of Japan anticipates the economy will reach full capacity in the next financial year, signaling optimism for sustained growth.
United Kingdom Shows Limited Growth Amid Fiscal Challenges
The UK economy stagnated in Q3 2024, with GDP growth revised to 0% from an earlier estimate of 0.1%. While construction rose by 0.7%, the services sector and production lagged, leading to a 0.2% decline in real GDP per head compared to Q3 2023.
Despite setbacks, the OECD upgraded the UK’s GDP growth forecast to 1.7%, citing increased public spending. However, inflationary pressures and fiscal challenges, including high public debt and aging population costs, require policy interventions to sustain economic momentum.
A Global Perspective On Economic Resilience
2024 underscored the resilience of major economies amidst challenges such as inflation, geopolitical risks, and structural inefficiencies. Emerging economies like India demonstrated robust growth, while advanced economies such as the US and Japan showcased stability and adaptability. The focus on addressing inflation, fostering sustainable growth, and reducing inequalities will be critical for the global economy’s trajectory in the years.Â