UN Predicts Global GDP to Drop to 2.4%: University of São Paulo Analysis

A report by the United Nations (UN) projects that the world’s Gross Domestic Product (GDP) is expected to decline and close the year 2024 at 2.4%, compared to the 2.7% recorded in 2023. This slowdown should impact the agricultural production and infrastructure due to global warming. The reasons are diverse, including the war in the Middle East and Eastern Europe. Professor Daniel Bergmann, from the Department of Administration at the Faculty of Economics, Administration, Accounting and Actuarial Science (FEA) at USP, a specialist in finance, analyzes the international scenario.

Regarding the United States, the largest economy in the world, there is an expectation of decline. The slowdown from 2.5% in 2023 to 1.4% in 2024, partly due to the policy of increasing interest rates, also reducing consumption and, consequently, investments. 

Europe must be greatly harmed by the war between Russia and Ukraine, mainly due to Russia’s energy dependence, increasing inflation in certain countries such as the United Kingdom. The environment is challenging given inflation and high interest rates. The UN projection in the euro zone should be 1.2% in 2024 compared to 0.5% recorded in 2023.  

Japan

On the other side of the world, Japan should continue to invest in technology and, in return, India should have another year of growth.

The world’s second largest economy, China, will continue to slow down in the short term. Chinese GDP, which closed 2023 at 5.3%, is expected to end 2024 at 4.7% due to the real estate sector and weakened external demand, putting downward pressure on activity.

Brazil should show an increase in GDP and a forecast of an increase in commodity prices, attracting more investments. Brazil’s challenge still lies in controlling the high public debt that affects the population, just as it is expected that the fiscal reform will encourage investments to obtain the necessary growth.