Geopolitical uncertainty slowing growth, but GDP rebound forecast for 2025

KPMG forecasts global GDP growth to slip from 2.7% in 2023 to 2.5% in 2024

Global GDP to slip to 2.5%

  • A return to 2.7% growth forecast for 2025
  • Inflation forecast to continue cooling in most regions, but price pressures could take longer to unwind 

KPMG Global Economic Outlook – Q2 2024













Unemployment rate




KPMG is forecasting global growth will slow from 2.7% 2023 to 2.5% in 2024 and rebound to 2.7% next year. Meanwhile, inflation is expected to continue to cool, but in many countries the price pressure will take longer to unwind than it took to emerge.

The latest predictions in KPMG’s Q2 2024 Global Economic Outlook reflect the current elevated geopolitical uncertainty, with nearly half of the world’s population already voting or heading to the polls in 2024. Armed conflict and trade tensions are flaring in numerous parts of the world which could fuel more isolationist policies. KPMG’s international team of economists believe the resulting risk could be more frequent bouts of inflation and the possibility of sharper shifts in monetary policies. 

A slower expected glide path on rate cuts by the U.S. Federal Reserve, which plays an outsized role in global financial markets, will have a larger impact on rate decisions by developing economies. These markets could be more sensitive to exchange rate movements than we have seen in the past. Weakening currencies relative to the U.S. dollar are inflationary for those economies. To further complicate matters, foreign exchange markets have been reacting to unexpected election outcomes.

Faced with interest rate uncertainty and political uncertainty, business leaders remain hesitant to engage in major investment projects. Consumers are cutting back on major purchases due to elevated rates, while governments face higher financing costs as debt rolls over at higher interest rates.

Supply chains are being reshuffled as producers hedge against geopolitical risk, often at higher costs. The conflict in the Middle East has caused seaborne trade to be rerouted, while higher-than-expected demand and weather have also increased shipping costs. The National Atmospheric and Oceanic Administration expects a record number of major storms for 2024, which will only add to shipping times and snarled travel.

Despite uncertainty deepening this year, KPMG’s economists remain cautiously optimistic about the long-term outlook.

Yael Selfin

Prospects for 2025 are better, with inflation expected to return towards target and central banks more confident to cut policy rates from the current restrictive levels. The silver lining is a tailwind for big-ticket consumer purchases and business investment. Merger and acquisitions activity could also continue to gather steam, as financial conditions ease and dry powder is deployed. However, the uncertainty remains around the political shifts, which could see more insular and protectionist economic policies.

Yael Selfin
Vice Chair and Chief Economist at KPMG in the UK

It is uncertain when the much-vaunted productivity boost from generative artificial intelligence (GenAI) will manifest itself at the global level. One of the hurdles is the energy needed to run the large language models, but mass adoption is also expected to take time. A diverging speed in adoption could exacerbate inequality between the developed and developing economies. While advances in AI could also disrupt labor markets during the transition period, KPMG’s economic forecast is nonetheless consistent with a broadly stable unemployment rate globally.

Regina Mayor

For politicians and central banks, the challenge going forward is contending with the rise in political uncertainty, deglobalization and a changing workforce demographic, at a time when international collaboration and – simply – the availability of people to increase productivity, is at a premium.
While challenges remain, the outlook – in my view – is cautiously optimistic. The inflationary pressures are easing in many parts of the world and the political will is gradually shifting toward consensus on the need to drive growth. There will be bumps in the road ahead, but we’re slowly seeing light at the end of the tunnel.

Regina Mayor
Global Head of Clients & Markets at KPMG International

KPMG’s Q2 2024 Global Economic Outlook will be available to read in full at

For media queries, please contact:

Brian O'Neill
KPMG International
T: +44 7823 668 689

About KPMG International

KPMG is a global organization of independent professional services firms providing Audit, Tax and Advisory services. KPMG is the brand under which the member firms of KPMG International Limited (“KPMG International”) operate and provide professional services. “KPMG” is used to refer to individual member firms within the KPMG organization or to one or more member firms collectively.

KPMG firms operate in 143 countries and territories with more than 265,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. Each KPMG member firm is responsible for its own obligations and liabilities.

KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

For more detail about our structure please visit:

Connect with us

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today