Macroeconomic development

According to figures published by the International Monetary Fund (IMF), the global economy achieved moderate but stable growth in 2024. After losing momentum in spring, global economic growth over the year as a whole was only slightly stronger than expected. For the third quarter, the IMF expects that global economic growth will be 0.1 percentage point lower than it forecast in October 2024. This is primarily due to poorer performance figures from certain Asian and European countries. For 2024 as a whole, global economic growth is expected to be below its historic average at 3.2 %.

There was also moderate growth in global trade. It was affected on the one hand by impending trade restrictions and increasing geopolitical uncertainty, and on the other by a global decrease in inflation coupled with slow economic recovery in several regions. The IMF continues to see challenges for many economies, particularly with regard to inflation, interest rates and supply chains. Nevertheless, there were signs of moderate growth in some areas, especially from emerging markets and the USA.

Economic growth in the advanced economies was mixed. Total economic output of the industrialised nations increased by 1.7 % in 2024. Whereas the US economy grew significantly by 2.8 % on the back of strong consumer spending, growth in the eurozone continued to be hampered by weak manufacturing and exports, with Germany trailing behind other EU countries. The IMF expects gross domestic product (GDP) in the eurozone to grow by just 0.8 % in 2024.

There were also considerable differences in economic growth among the emerging economies. According to IMF estimates, overall economic growth reached 4.2 % in 2024. In China, year-on-year growth was lower than expected. Faster than expected growth in net exports only partly offset the unexpectedly strong slowdown in consumption as the property market continued to stall and consumer confidence remained low. According to the IMF, the world’s second largest economy grew by 4.8 % in 2024.

The Russian economy accelerated more quickly than expected. According to the latest IMF estimates, Russian GDP grew by 3.8 %, and thus by 0.2 percentage points more than forecast in October 2024. Rising government spending on arms helped stimulate economic growth, despite the Western sanctions. Following on from strong economic growth of 5.3 % in 2023, the IMF’s October 2024 forecast for Ukraine predicted significantly slower growth of 3.0 % for the past year. By contrast, the Estonian economy is likely to shrink by 0.9 % (IMF, October 2024).

As in the previous year, the German economy continued to shrink in 2024. This economic weakness was partly due to high energy prices, which put strain on industrial output. As an export nation, Germany also suffered from weak global demand. Creaking infrastructure and a stagnating construction sector only served to further hamper economic growth. According to IMF estimates, economic output for Europe’s largest economy decreased by 0.2 % in the year as a whole.