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US' economy set for 2.5% growth in 2024: Report

01 Apr '24

1 min read

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US' economy is projected to increase by 2.5 per cent in 2024, following a 3.1 per cent increase in Q4 2023, but a slowdown to 1.8 per cent by Q4 2024 is expected, according to an S&P Global report.
Despite reduced recession risks, demand factors like consumer and government spending may decrease, while net exports could boost the economy.

The US economy is gearing up for a repeat performance of last year's success, with a projected average growth of 2.5 per cent in 2024, buoyed by a strong labour market, according to a report by S&P Global Ratings. This growth rate mirrors the performance against global peers observed last year. However, this average figure may paint an overly rosy picture of the economic landscape. A robust carryover from Q4 2023, which saw an annual growth rate of 3.1 per cent, somewhat obscures the expected slowdown to 1.8 per cent by Q4 2024.

The likelihood of a recession in the next 12 months has diminished since last spring. Despite this, the demand-driving factors of 2023, notably consumer spending and direct government spending, are anticipated to wane over time. Moreover, the constrictive monetary policy is set to curb fixed business and residential investment. Net exports, on the other hand, are expected to contribute positively to the economic outlook, as per the Economic Outlook US Q2 2024 report.

A detailed analysis reveals that while the US economy starts the year on strong footing, the growth is predicted to decelerate gradually through to Q4 2024.

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