IN FOCUS6-8 min read
Schroders Economics Lens Q3 2024
Onwards and upwards: read more in your chart-pack guide to the global macroeconomic outlook.
Profily autorov
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 Q3 copy. Schroders Q3 Economic Lens
Summary:
- We forecast global growth to come in at 2.7% for both 2024 and 2025, marginally lower than the 2.8% previously assumed. Inflation is still expected to be 3.1% in 2024, before falling back to 2.5% in 2025, a touch higher than our prior 2.4% forecast.
- We think concerns about an imminent US recession are overblown. Recent communications support our view that the Federal Reserve will start cutting rates in September. But with growth and labour market indicators still consistent with a soft landing, solid economic fundamentals suggest that market expectations for large rate cuts are likely to be disappointed. Indeed, our aggressive rate cuts scenario suggests that major easing now would risk a second wave of inflation in 2025.
- November’s presidential election could materially change the medium-term outlook for the US economy. Our working assumption is that Harris will prevail, but it is clearly a close call, and a Trump victory would probably be reflationary for the US.
- We expect growth to pick up in Europe and the UK, while further near-term disinflation will make space for additional interest rate cuts over the coming quarters. However, imbalances in Europe’s economy and concerns about the supply side of the UK suggest that faster growth will ultimately come at the expense of sticky inflation next year. As such, we expect both the European Central Bank and Bank of England to call an early end to their easing cycles in mid-2025.
- China now looks set to fall short of its 5% growth target this year. With the authorities still reluctant to deliver meaningful policy support, growth is likely to slow even further next year once the export cycle rolls over.
Profily autorov
Témy