In 2024, the global economy demonstrated a certain degree of resilience despite numerous challenges and did not experience a large-scale crisis. The global economic growth rate was 3.2%, inflation further declined, but the unemployment rate increased. 2024 was a year of global elections, with at least 70 countries holding elections. Government divisions increased, populism strengthened, and the overall political inclination shifted to the right. However, the UK Labour Party won the election, which was an exception. In terms of policy, global inflation eased, and most economies began to cut interest rates. Among the 37 major central banks, 27 entered a rate-cutting cycle.

The United States’ GDP growth rate in 2024 was 2.8%, exceeding market expectations for two consecutive years. Domestic demand was strong, corporate profits increased by 7.7%, and the corporate profit margin reached its highest level in 70 years. The Federal Reserve began to cut interest rates in September, but the market expects limited room for further rate cuts. The policy direction of the Trump 2.0 era includes tax cuts, deregulation, trade protectionism, and immigration restrictions, which may stimulate the economy but also bring the risk of re-inflation. The risk in commercial real estate has decreased, but the national debt issue remains a potential crisis.

In 2024, the profit margin of US companies reached the highest level in 70 years, mainly due to inflation, which enabled companies to increase their profit margins through price hikes. However, the rise in corporate profits has exacerbated the wealth gap in the United States, with profits increasingly concentrated in the hands of a few large companies. The proportion of the top ten market value companies has doubled from 18% a decade ago to 36%, with Apple, Nvidia, and Microsoft alone accounting for 20%. This has led to a widening wealth gap between entrepreneurs and workers, as well as between large and small businesses. Despite the favorable economic data, many Americans did not experience a corresponding improvement in their actual situation, and there was even a phenomenon of large-scale layoffs, with wealth concentrated in the hands of a small number of people.

Politically, the policies of the Trump 2.0 era may include tax cuts, deregulation, trade protectionism, and immigration restrictions. While these policies appear to stimulate the US economy, they also pose risks of re-inflation and economic uncertainty.

Japan’s GDP growth in 2024 is expected to be 0.3%, with mediocre economic data but actual improvement. The Bank of Japan began to raise interest rates in 2024, exiting the long-term negative interest rate policy. The largest wage increase in 33 years has driven the central bank to raise interest rates. The appreciation of the yen may affect exports.

Over the past two to three decades, Japan’s economy has relied heavily on the injection of liquidity and government debt, leading to a distorted economy. Japan’s monetary policy is contrary to that of other major economies, with the central bank raising rates while others are cutting rates. This is because its policy adjustment lags behind global inflation changes by about two years. However, in 2024, Japan’s economy has shown a shift, with rising corporate profits and stock prices, as well as the emergence of inflation. The central bank has begun to exit its unconventional policies. The Bank of Japan’s balance sheet is enormous, and the expected balance sheet reduction in 2025 may trigger a large-scale repatriation of overseas assets, but it is also necessary to be vigilant about the impact of yen appreciation on exports.

Germany’s GDP shrank by 0.1% in 2024, marking the second consecutive year of contraction. Fiscal policy remains conservative, with the debt brake law restricting government spending. Divisions have emerged within the ruling party, and early elections are scheduled for February 2025. The country is also grappling with severe population aging, labor shortages, and declining productivity.

Germany is facing serious population aging issues, with the baby boomers of the 1960s now reaching retirement age, accelerating the contraction of the labor market and, in turn, affecting productivity and economic growth. The country is also dealing with structural energy shortages, labor shortages, and rigid government policies. These deep-seated structural problems are slowing down Germany’s economic recovery.

China’s GDP growth rates for the first three quarters were 5.3%, 4.7%, and 4.6%, respectively, and the full-year target of 5% was achieved in the fourth quarter. Exports performed well, investment was average, and consumption was weak. Insufficient domestic demand and confidence are the main issues, affecting prices and the job market. Policy-wise, the issuance of ultra-long-term special treasury bonds and the reduction of existing mortgage interest rates were implemented to stimulate consumption. The real estate market is in a deep adjustment period, but stimulus policies continue to be rolled out. It is expected that in 2025, policies will shift towards a comprehensive market stimulus, including faster interest rate cuts, purchasing more treasury bonds, and increasing the fiscal deficit. Additionally, the renminbi may moderately weaken to cope with trade wars and stimulate exports.

India: GDP growth rate was 7.0% in 2024, with strong domestic demand mainly driven by investment, but inflation risks have increased. Russia: GDP growth rate was 3.6% in 2024, with firm energy prices, but the ruble fell in the fourth quarter, and inflation rose. United Kingdom: GDP growth rate was 1.1% in 2024, with inflation dropping below 3% and an unemployment rate of 4.3%, returning to a normal development pattern. Argentina: Had the worst economic growth globally in 2024, but is undergoing shock therapy reforms and is expected to rebound in 2025. Guyana: Thanks to oil discoveries, the average GDP growth rate over the past five years has reached 40%, with a significant increase in per capita GDP.

In 2024, global economic policies shifted towards stability, and most economies began to accelerate growth again. The global economic forecast for 2025 is relatively optimistic, but the biggest uncertainties are Trump’s trade policies and whether China’s consumer lending will pick up.