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S&P revises US real GDP forecast, expects 2.4% expansion in 2024

Published 02/22/2024, 08:41 AM
Updated 02/22/2024, 08:44 AM
© Reuters.  S&P revises US real GDP forecast, expects 2.4% expansion in 2024

S&P Global Ratings has updated its forecast for U.S. real GDP growth, now expecting a rise of 1.6% from Q4 2024 to Q4 2023, an improvement from the previously predicted 0.8%.

For the entire year of 2024, the growth projection has been raised to 2.4%, up from an earlier estimate of 1.5%.

This forecast is slightly below the 2.5% growth experienced in 2023, as per preliminary estimates from the U.S. Bureau of Economic Analysis, yet it aligns with the average growth rate of 2.4% seen during the 2010-2019 expansion period.

“Better-than-anticipated real GDP growth in the fourth quarter of 2023 and a jobs market that appears sturdier than implied just one month ago led us to revise up our forecasts,” the credit rating agency said in a Wednesday report.

The U.S. economy's expansion in the second half of 2023, with a seasonally adjusted growth rate of 4.0% following a modest 1.1% in the first half, outperformed S&P Global Ratings' expectations.

S&P predicts a continued decline in inflation over the next few months, despite the bumpy path of disinflation observed so far.

It has maintained its monetary policy outlook for 2024, anticipating that the Federal Reserve will reduce its policy rate by 25 basis points during the June meeting and will make additional cuts to reach a total of 75 basis points by the end of the year.

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