U.S. investment bank Goldman Sachs (GS) is forecasting that the global economy will perform better-than-expected in 2024, driven by strong income growth and declining interest rates.
The Wall Street firm forecasts that the world economy will grow at an annualized rate of 2.6% next year, which is above the 2.1% consensus forecast of economists who were recently polled by Bloomberg Markets.
Goldman also said that it expects the U.S. will outpace other developed nations in 2024 with annualized growth of 2.1%.
The bullish forecast comes as Goldman Sachs’ analysts say that interest rates have likely peaked and should start to come down in 2024, barring some unforeseen event.
The U.S. Federal Reserve and other central banks around the world have aggressively raised interest rates over the last 18 months to bring inflation down that had been at its highest level in 40 years.
Goldman Sachs said in its report that it believes the worst of the central bank tightening cycles is now over and that lower interest rates should spur economic growth next year.
The stock of Goldman Sachs has declined 6% this year to currently trade at $326.91 U.S. per share.