We think that global growth will undershoot consensus expectations in 2024 as various props to growth from 2023 fade and as the lagged effects of past rate hikes continue to feed through. Among the advanced economies, the US will continue to outperform Europe. And while China’s policy-induced recovery is set to continue in the near term, strong structural headwinds will put the economy on a weaker track by the second half of 2024. Subdued growth and cooling labour markets are likely to bring inflation back to central banks’ targets sooner than most anticipate. Accordingly, DM central banks will join a growing number of EM central banks in cutting rates this year.
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