UBS Global Research Pod Hub
2024 Global Outlook - Part One: What are the Key Economics Calls?
Nov 24, 2023
The podcast discusses the key economics calls and main features of the global economics and markets outlook for 2024-2025. Topics include global growth forecast decrease, disinflation and policy easing, negative impact of global credit impulse, and forecasted U.S. recession. It also explores scenarios and models for global economic growth, such as European consumption improvement, likelihood of US recession, impact of lower China growth, disinflation process, and view on central bank actions.
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Quick takeaways
- The global growth forecast for 2024 is expected to decline due to weaker growth in the US and China, primarily driven by property market stabilization in China and negative quarters in the US.
- UBS expects a much more aggressive 275 basis points of rate cuts by the Federal Reserve, compared to the consensus of three to four cuts, based on UBS's forecast of inflation below target and unemployment slightly above the non-inflationary rate of unemployment (NIRU).
Deep dives
Weak global growth and factors driving the decline
The global growth forecast for 2024 is expected to be about 50 basis points lower than the previous year, primarily due to weaker growth in the US and China. The slowdown in China is a result of property market stabilization and the absence of a Q1 reopening boom. In the US, a couple of negative quarters in the middle of the year contribute to the overall decline in global growth. Despite the growth forecast being in line with consensus, there are notable differences in terms of disinflation and policy easing. The decline in inflation is expected to increase real disposable income, but the main reason for the downward growth trend lies in the negative global credit impulse, which is at its lowest level since the global financial crisis.
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