What's on the horizon for the global economy?
Our weekly updated overview highlights the key releases of global economic market data from around the globe and provides an economic outlook for 2024 by region.
- Our Week Ahead podcast explores the key themes driving global markets next week
- Our Global Economic Markets Data Calendar shows upcoming events happening over the week
- We provide an outlook overview region by region
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Our view in a nutshell
Japan
- Japan’s economy has been and will continue to be on a recovery path, exceeding potential, since Q2 2024.
- The Ishiba cabinet plans to expand fiscal policy through negotiations with some opposition parties such as DPP.
- On 18 October, Rengo released its basic concept for 2025 shunto with a wage hike target of ‘5% or above’.
- We expect the BOJ to make an additional rate hike in December 2024, followed by two hikes in 2025.
Asia
- We expect Asia’s export growth to gradually ease, due to softening global demand, fading price effects and the end of frontloading.
- Growth divergences exist: Taiwan and Singapore are likely to outperform, while China and Thailand could disappoint.
- Inflation is likely to remain benign and within target. Risks are skewed towards further disinflation given Trump win.
- Fewer Fed rate cuts mean less easing by BI and BOK. For other central banks, we expect policy decoupling from the Fed.
- Korea: Despite slowing growth, we expect only 50bp of more rate cuts by end-2025 owing to renewed FX market concerns.
- India: Amid softening growth and lower inflation, we expect the RBI to deliver 100bp of rate cuts, starting in February 2025.
- Indonesia: Populist measures of the incoming government raise fiscal risks while current account deficits continue to widen.
- Australia: We expect unemployment to drift higher, inflation to grind lower, and rate cuts from February 2025..
- New Zealand: Inflation is close to target, the economy weak, and policy still tight. We forecast further aggressive easing ahead.
China
- We see new headwinds, such as plummeting equity financing, strengthening tax collection and a financial sector crackdown.
- Ongoing headwinds include fading pent-up demand, property fallout, local government debt and investment in “green” sectors.
- We believe Beijing is headed in the right direction on ending the housing crisis, as its policy focus shifted to home delivery.
- But this is a daunting task, patience is needed as it will take time for Beijing to fully prepare.
United States
- We expect the Fed to cut 25bp in December, followed by another 25bp rate cut in March 2025.
- Tariffs and tax policy will be the focus for economic policy early in a second Trump administration.
- We anticipate tariff-driven inflation by mid-2025 will lead to a prolonged pause in the Fed’s easing cycle.
- The labor market is slowing, and risks remain skewed to the downside. Gradual cooling is more likely than a sharp deterioration.
Canada
- We expect the BoC to deliver a 50bp cut in December, followed by three consecutive 25bp cuts through April 2025.
- Inflation has returned to the BoC’s target range. Elevated shelter inflation is likely to moderate gradually as the BoC eases policy.
- The unemployment rate is set to continue to rise, and growth in real GDP per capita remains negative.
Euro Area
- We expect a slow recovery in economic growth, held back by soft consumption and a structurally weak German economy.
- We see core inflation above target through 2024-2025, but services inflation momentum gradually slowing.
- With weaker growth and inflation, we expect 25bp cuts at each ECB meeting until mid-2025 and a final cut in September to 1.75%.
- The ECB began full roll-off of its APP portfolio redemptions in July 2023. Partial PEPP tapering began in July 2024.
United Kingdom
- UK GDP bounced strongly in H1 after last year’s weakness. Surveys point to positive but slower growth in H2 2024.
- Upside risks: low unemployment, budget measures. Downside risks: past monetary tightening and below-average confidence.
- Headline inflation is close to target, but services inflation is proving more sticky and could take some time to normalise.
- After commencing the easing cycle in August 2024, we expect a continuation of quarterly cuts. Risks are for faster cuts.
For more information read our weekly report here.
Contributor
Aichi Amemiya
Senior US Economist
George Buckley
Chief UK & Euro Area Economist
Ting Lu
Chief China Economist
Kyohei Morita
Chief Economist, Japan
Euben Paracuelles
Southeast Asia Economist
David Seif
Chief Economist for Developed Markets
Rob Subbaraman
Head of Global Macro Research
Sonal Varma
Chief Economist, India and Asia ex-Japan
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