PASHA BANK ANNUAL REPOT 2024
Global Economy In 2024, the global economy faced numerous challenges and uncertainties. The International Monetary Fund (IMF) set its global growth forecast at 3.2% in April and reaffirmed this estimate in July. However, the World Bank announced a more modest global growth of 2.4% at the end of the year. The U.S. economy exceeded expectations in 2024, demonstrating stable growth. Gross Domestic Product (GDP) expanded by 1.6% in the first quarter, 3.0% in the second quarter, and 3.1% in the third quarter. The third- quarter growth was primarily driven by increased consumer spending, exports, nonresidential fixed investments, and federal government expenditures. While consumer spending and exports were revised upward, private inventory investments were adjusted downward. At the same time, imports also saw an upward revision. The Organisation for Economic Co-operation and Development (OECD) forecasts that the U.S. economy will grow by 2.6% in 2024. On the inflation front, the Personal Consumption Expenditures (PCE) price index increased by 1.5% in the third quarter, while the core PCE price index, which excludes food and energy expenses, rose by 2.2%. The Federal Reserve (Fed) closely monitors the core PCE price index as part of its inflation policy. In terms of monetary policy, the Fed reduced its policy rate by 25 basis points in September, bringing it to the range of 4.75-5.00%. The Fed continued interest rate cuts in November and December, resulting in a total reduction of 100 basis points by the end of 2024. During its final meeting in December, the Fed signaled a more cautious approach to rate cuts in 2025. As a result, market participants have revised their expectations for rate cuts in 2025 from four to two. As a result, the U.S. economy demonstrated stable growth in 2024, supported by robust consumer spending and exports. Inflation remained under control, while the Fed’s rate cuts continued to stimulate economic activity. In the Eurozone, growth reached 0.6% in the second quarter; however, inflation continued to exceed expectations. The European Central Bank (ECB) initiated policy rate cuts in June 2024 and maintained interest rate cut policy throughout the year to support economic recovery. In 2024, the European Union (EU) economy encountered various challenges, prompting a downward revision in growth projections. According to the “Autumn 2024 Economic Forecast” report released by the European Commission in November 2024, the EU economy is projected to grow by 0.9% in 2024, 1.5% in 2025, and 1.8% in 2026. For the Eurozone, growth forecasts are estimated at 0.8% for 2024, 1.3% for 2025, and 1.6% for 2026. On the inflation front, the annual inflation rate in the Eurozone increased from 2.0% in October 2024 to 2.2% in November. Across the EU, annual inflation rose from 2.3% in October to 2.5% in November. Economic performance disparities among member states remain pronounced. For instance, the German economy is projected to shrink by 0.1% in 2024, whereas France is anticipated to grow by 1.1%, Italy by 0.7%, and Spain by 3%. THE WORLD BANK ANNOUNCED A GLOBAL GROWTH OF 2.4% FOR 2024. world: 2.4% growth 2024 OVERVIEW AND EXPECTATIONS FOR 2025 22 PASHA Bank 2024 Annual Report
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