The economy should expand at an upwardly revised pace of 2.7% year-over-year in 2024 (from 2.6%) and 2.0% in 2025 (from 1.7%). US real GDP growth in 2026 should settle at its potential rate of 1.8%. Inflation is expected to stabilize at the Fed's 2% target in Q4 2025, later than the original Q2 2025 estimate.
U.S. Economy Rides a Strong 2024 Finish Into New Year. Gross domestic product is expected to grow between 2% and 2.5% this year. WASHINGTON, D.C. — Economic growth withstood inflation, high interest rates and other challenges in 2024 and should continue to show strength in 2025.
Rising Interest Rates
However, there is some minor concern that the lagged impact from elevated interest rates from 2024 could still bring about a recession. For example, the New York Federal Reserve's predictive model gives a 30% chance of a recession by December 2025.
For 2025 real GDP growth, the highest forecasted value is 2.7% and the lowest is 1.5%. The average of the top 10 forecasts for GDP growth (most optimistic) is 2.5% while the average of the bottom 10 (most pessimistic) is only 1.9%.
We expect developed economies to experience a slight slowdown, with growth tapering from +1.8% in 2025 to +1.7% in 2026. In contrast, emerging economies are likely to sustain robust growth at +4.1% across both years. The US economy is forecasted to grow at +2.3% in 2025, slowing to +1.8% in 2026.
A 5-year pro forma is a financial forecast that shows how a business might perform over the next few years, in terms of future sales and cash flows. It's a way to peek into your company's future, plan for what's ahead, and show investors your company's potential.
June 2024 Edition: Growth Stabilizing But at a Weak Pace
Despite an improvement in near-term prospects, the global outlook remains subdued by historical standards. In 2024-25, growth is set to underperform its 2010s average in nearly 60 percent of economies, comprising over 80 percent of the global population.
Knowing how to prepare for a recession means proactively approaching your finances. Start by establishing a budget, removing unnecessary expenses, and building an emergency fund. Consider paying down debt to improve your financial stability and reduce your reliance on credit during tough times.
Lasting from December 2007 to June 2009, this economic downturn was the longest since World War II. The Great Recession began in December 2007 and ended in June 2009, which makes it the longest recession since World War II. Beyond its duration, the Great Recession was notably severe in several respects.
Economic growth is likely to decelerate in 2024 as the effects of monetary policy take a broader toll and post-pandemic tailwinds fade. We expect real GDP growth to walk the line between a slight expansion and contraction for much of next year, also known as a soft landing.
Outlook: 2024 is a good year, but you should ensure that you take good care of your health and emotional well-being. Advice: Maintain an active lifestyle and avoid ignoring your health. Oftentimes in life, what is easy to do is not worth it.
We project inflation to continue to fall, averaging 2.4% in 2024 and then averaging just 1.8% over 2025 to 2028.
In this context, we foresee real GDP growth decelerating modestly from 2.7% in 2024 to 2.1% in 2025 and 1.7% in 2026 — when tariffs pose a greater drag on the economy.
2024 in review: A "Goldilocks" year for US stock returns
While 2023 was a year of frustration, as many missed the 26% rally, 2024 was one of ebullience and momentum—at least toward the end. The market set new all-time highs in January, which turned out to be a bullish omen that the market would gain momentum.
After 14 months of stagnancy, the Federal Open Market Committee (FOMC) lowered the federal funds rate three times in 2024, ending the year with a target range of 4.25% to 4.50%, the lowest since February 2023.
Stocks and bonds have relatively low transaction costs, allow you to diversify more easily and leave your cash more liquid than real estate (although the stock market is typically more volatile than the housing market). Meanwhile, real estate is a hedge against inflation and has tax advantages.
The industries known to fare better during recessions are generally those that supply the population with essentials we can't live without. They include utilities, healthcare, consumer staples, and, in some pundits' opinions, maybe even technology.
Global recession outlook
There is now a 35% chance that the global economy will enter a recession by the end of 2024, and a 45% chance that it will do so by the end of 2025.
The RBI projects India's GDP growth rate at 6.6 percent for the fiscal year 2024–25, indicating a recovery trajectory following the economic slowdown experienced during the first half of the fiscal year. This growth forecast reflects a positive outlook for the economy amid improving financial stability.
Sign up for stock news with our Invested newsletter. Many economists, including Federal Open Market Committee (FOMC) members, anticipate a soft landing for the U.S. economy in 2025 that includes slowing gross domestic product growth but no recession.
Overall employment in business and financial occupations is projected to grow faster than the average for all occupations from 2023 to 2033. About 963,500 openings are projected each year, on average, in these occupations due to employment growth and the need to replace workers who leave the occupations permanently.
The Fed is currently expected to lower its benchmark rate twice in 2025. "This would take the prime rate down to 7% if that forecast remains constant," says Lindsey Harn, a real estate agent at Christie's International Real Estate.
Financial forecasts are designed to give business owners an insight into the company's future. You get to decide how far into the future to look, and it can range from several weeks to several years. However, most companies do forecasts for one fiscal year.