Goldman Sachs predicts global economic recovery in 2024

Goldman Sachs Forecasts Global Economic Recovery in 2024, Predicts Easing Inflation

Goldman Sachs, one of the world’s leading investment banks, has projected a global economic recovery by 2024, with expectations of subsiding inflation. This forecast comes as a beacon of hope amidst ongoing economic challenges marked by high inflation and slow growth.

According to Goldman Sachs’ economists, the global economy, which has been reeling under the impact of the COVID-19 pandemic, geopolitical tensions, and supply chain disruptions, is poised for a rebound. They anticipate that the measures taken by central banks and governments worldwide to curb inflation will start showing positive results, setting the stage for recovery.

“That outlook is based on our economists’ prediction for strong income growth (amid cooling inflation and a robust job market), their expectation that rate hikes have already delivered their biggest hits to GDP growth, and their view that manufacturing will recover,” the bank said in a position piece.  “Central banks, meanwhile, will have room to reduce interest rates if they’re concerned about the economy slowing. “This is an important insurance policy against a recession,” Goldman Sachs Research Chief Economist Jan Hatzius writes in the team’s report titled Macro Outlook 2024: The Hard Part Is Over.”

Inflation to subside in 2024

The investment bank’s outlook suggests that inflation, which has been a key concern for economies around the world, is likely to ease by 2024. This prediction is based on the belief that supply chain issues will gradually resolve, and the labor markets will stabilize, easing price pressures. The report also highlights the potential for technological advancements and improved productivity to contribute to economic stability.

“Importantly, GDP growth and employment have been surprisingly buoyant among economies that experienced a large and unwanted inflation surge in 2021-2022. (Policymakers in Japan, by contrast, wanted inflation.) And inflation is now cooling across G10 and emerging market economies,” the report added.

Goldman Sachs’ analysis offers a more optimistic view compared to some other forecasts, which have been more cautious about the prospects of a quick economic recovery. Their predictions are grounded in a detailed analysis of economic indicators, market trends, and policy measures.

The forecast is significant as it shapes the expectations of investors, businesses, and policymakers. A global economic recovery would be crucial for improving living standards, reducing unemployment, and boosting consumer confidence. However, the bank also cautions that the path to recovery could be uneven, with different regions and sectors recovering at varying paces.

The easing of inflation would be a welcome relief for consumers and businesses alike. High inflation rates have been squeezing household budgets and impacting business operations, making affordability a critical issue.

Goldman Sachs’ forecast of a global economic recovery by 2024, accompanied by easing inflation, offers a positive outlook for the world economy. While uncertainties remain, such projections play a vital role in guiding economic strategies and fostering a climate of optimism.