• Global economic growth is expected to stabilise with growth in the short term as household spending has offset uncertainty about the ongoing war in Ukraine and the evolving conflicts in the Middle East;
• While the Australian economy has stalled in the first half of 2024, economic growth is projected to pick-up through the final quarter of 2024 boosted by growth in household consumption and public sector demand;
• Victoria’s economy is forecast to grow next year, with most major components forecast to contribute to overall economic growth, led by households making the largest contribution.

Economic Summary

The global economy remained resilient this year to date, with many central banks commencing an easing of monetary policy settings as inflation levels reduce. The shift in policy mix is occurring against a backdrop of conflicts intensifying and trade tensions escalating within a soft global economy. While the Australian economy has stalled in the first half of 2024, economic growth is projected to increase further in 2025, reflecting recent announcements by federal and state and territory governments. The Victorian economy continues to grow, despite the challenges of high inflation and elevated interest rates with its economy forecast to grow by 2.50% over the year to June 2025.

Q3 2024 – Global Economic Overview

The global economy remained resilient in 2024 to date, with output growing at an estimated annualised rate of 3.2%. Declining inflation has supported household spending, providing a counterbalance to the negative impact from restrictive financial conditions and the uncertainty about the ongoing war in Ukraine and the evolving conflicts in the Middle East.

GDP growth over the past year has been weak across most advanced economies, but now seems to be gradually recovering. Looking ahead, global growth is expected to stabilise with growth of 3.2% projected in both 2024 and 2025.

In the United States and Canada, economic growth is projected to slow in 2025, easing from the solid pace observed this year. Nonetheless, monetary easing is projected to help underpin stronger growth through the second half of next year. The US economy is projected to expand by 2.6% in 2024 and 1.6% in 2025.

Global Economic Growth

Europe will also benefit from policy rate reductions and the further recovery in real incomes, with Euro area growth projected to be 0.7% in 2024 and 1.3% in 2025, and the UK economy expanding by 1.1% in 2024 and 1.2% in 2025.

In China, growth is expected to be supported through the second half of 2024 by an increase in government spending. Even so, the protracted correction in the real estate sector is anticipated to continue to impact consumer confidence, with economic growth projected to be 4.9% in 2024 and 4.5% in 2025.

Solid domestic demand growth is projected to continue in India with economic growth projected to be 6.7% year ahead and increasing to 6.8% the following year.

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