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Goldman Sachs predicts the global economy will top expectations in 2024, driven by strong income growth and confidence that the worst of rate hikes is already over.
The investment bank forecasts the world economy to expand 2.6% next year on an annual average basis, above the 2.1% consensus forecast of economists polled by Bloomberg. The U.S. is expected to outpace other developed markets again with estimated growth of 2.1%, Goldman said.
Goldman also believes that the bulk of the drag from monetary and fiscal tightening policies is over.
To curtail rising inflation, the U.S. Federal Reserve started its aggressive rate hike campaign in March 2022 as inflation climbed to its highest levels in 40 years. Last Thursday, Fed Chair Jerome Powell said he is “not confident” the Fed has done enough to tackle inflation, and suggested that more rate hikes may be necessary.