Regional Economic Outlook: US Economy

Questions and Answers

Savings from pandemic era disruptions, income gains, and improvements in household balance sheets

1.0 per cent

United Kingdom

Weak foreign demand, sluggish private consumption and declining construction activity Signup and view all the answers

0.3 per cent Signup and view all the answers

2.3 per cent Signup and view all the answers

Personal Consumption Expenditure (PCE) Price Index Signup and view all the answers

2.3 per cent Signup and view all the answers

It has remained unchanged Signup and view all the answers

3.8 per cent Signup and view all the answers

Study Notes

The economy remains upbeat despite high interest rates, with a forecasted 2.3% growth in 2024, a 0.9 percentage points upward revision from January.
The Personal Consumption Expenditure (PCE) Price Index, the Federal Reserve's preferred inflation measure, is at 2.7% in March.
The unemployment rate is historically low at 3.8% in March.
Services inflation, including housing and utilities, remains high at 4% in March.
The Federal Reserve is expected to maintain a higher policy rate for longer, until inflation returns to the 2% target.
The economy is projected to grow by 1.7% in 2025, with inflation falling to 2.3% and the unemployment rate remaining relatively unchanged.

Europe faces significant headwinds as the region seeks to regain economic momentum.
Weak economic sentiment, tight financing conditions, and withdrawal of fiscal support continue to weigh on the outlook.
Economic activity is projected to slowly pick up in 2024 and 2025, with falling inflation, rising real incomes, and monetary easing.
Stronger exports are expected to support recovery as global trade rebounds.
Growth forecasts for the European Union are revised down slightly to 1.0% in 2024 and 1.6% in 2025.
The United Kingdom is experiencing a mild recovery after slipping into recession in the second half of 2023, with GDP projected to grow by 0.8% in 2024 and 1.5% in 2025.
Growth projections are downgraded for manufacturing-dependent economies, including Austria, Czechia, Finland, Germany, and Hungary.
Germany's economy is experiencing a prolonged slump, with growth forecast at only 0.3% in 2024, after a contraction by 0.3% in 2023.