Slow Growth in US Economy: Understanding the Factors Contributing to the decline in GDP

In the first quarter of 2024, the US economy experienced slower growth than expected, with GDP increasing by only 1.6%, lower than the predicted 2.4%. The decline in growth can be attributed to several factors, including decreased consumer spending, exports, and state, federal and local spending. Despite a significant drop in inflation from 9.1% in 2022 to 3.5%, prices are still higher than pre-pandemic levels, affecting consumption and global supply chains.

The US economy’s growth rate has declined due to a decrease in exports, which has contributed significantly to the slowdown. However, despite these challenges, the US economic outlook is better than other major industrialized economies. The International Monetary Fund (IMF) forecasts a growth rate of 2.7% for the US in 2024, higher than that of other G7 countries like Germany, which is projected to have only a 0.3% growth rate this year.

It’s also worth noting that most major currencies in the G20 group have depreciated against the US dollar this year due to various economic trends that will be crucial to monitor as the US continues its recovery from pandemic impacts. This news is likely to be a key issue in President Joe Biden’s re-election campaign against his possible opponent former President Donald Trump in November.