IN FOCUS6-8 min read
Schroders Economics Lens Q2 2024
Onwards and upwards: read more in your chart-pack guide to the global macroeconomic outlook.
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Schroders Economics Lens is a chart-pack guide to the global macroeconomic outlook.
It is published quarterly and illustrates the latest economic forecasts and views from Schroders' economics team. The Lens includes analysis of the outlook for growth, inflation, and interest rates, as well as topical issues.
Click here to download your Q2 copy. Schroders Q2 Economic Lens
Summary:
- Upward revisions to our forecasts mean that we expect the global economy to expand by 2.8% in both 2024 and 2025. Our forecast is above consensus and implies that most major economies will beat expectations over the next 18 months.
- Robust global growth should drive a further recovery in the global manufacturing cycle. Leading indicators are pointing firmly upwards and manufacturing PMIs are unlikely to peak until early-2025.
- Global inflation should continue to decline, but incoming data have been higher than expected and completing the last mile of disinflation against a backdrop of robust activity will remain the key concern for central banks.
- The US should remain the engine of global growth this year. A much longer run of softer data will probably be required before the Federal Reserve starts to cuts interest rates. Our baseline forecast assumes that a total of 75 basis points (bps) of rate cuts will begin in September (50bps this year; 25bps in 2025), but the balance of risks is towards a later and shallower easing cycle.
- The case for interest rate cuts is much clearer in Europe and the UK. Both economies have already suffered recession, while inflation is on a clear downward path. We expect the European Central Bank to cut rates in June, followed by the Bank of England in August.
- Emerging market (EM) GDP growth looks set to come in at 4.3% this year and 4% in 2025. China made a solid start to the year on the back of strong manufactured exports. Other major EM have also been faring well, and commodity exporters are likely to get a lift if the manufacturing cycle continues to push up prices.
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