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Global Economic Outlook for 2024: Predicting a Prolonged Slowdown

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Global Economic Outlook for 2024: Predicting a Prolonged Slowdown

Global Economies Face Challenges in 2024

As central banks evaluate their policies and the potential impact of external events, the world‘s major economies are bracing for challenges in the year 2024. The outlook suggests that while recession may be avoided, a slowdown is likely to persist in the near future.

Germany, the United Kingdom, and Japan are currently experiencing technical recessions, while China grapples with growth issues. However, the United States seems to be faring better with a soft landing.

Vincent Mortier and Matteo Germano, both investment experts at the Amundi Group, anticipate a prolonged slowdown in the US, with Europe revising downward its growth forecasts and expecting lower inflation in China. Laurent Benaroche, a fund manager at Edmond de Rothschild AM, identifies three key risks to global economic growth: a rebound in energy prices due to geopolitical concerns, China’s failure to recover, and central banks’ reluctance to lower rates.

In Europe, manufacturing demand has declined, affecting countries like Germany. However, services demand remains stable worldwide, which offers hope for a soft landing for the region as a whole. Despite the United Kingdom’s disappointing 2023 data, experts believe a soft landing is still within reach, contingent on the central bank’s actions.

Japan, which relies heavily on manufacturing, has also entered a technical recession, but wage adjustments could provide support for local consumption. As for China, efforts to stimulate the economy are observed, but risks of disinflation are evident.

The resilience of the US economy in 2023 has been attributed to low unemployment rates and excess savings accumulated during the pandemic. However, concerns loom over the potential weakening of consumption if inflation continues to rise above the target and interest rates remain high.

See also  China wants nothing to do with "decoupling".

Overall, as the world‘s major economies navigate these challenges, central banks’ policies and external factors will remain crucial to steering the global economy through 2024. Economic stability and growth will depend on coordinated efforts to address these pressing issues.

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