Global | A scenario between the cyclical and the structural

The outlook is particularly uncertain, combining slowdown with disinflation, a hangover from two major shocks (COVID-19 and war in Europe) and divergent cyclical trends among the three major global economies.

Key points

• Key points:
• All this is in a context of structural changes whose impact is still difficult to assess but whose importance is unquestionable: geopolitical turmoil, heightened awareness of climate change, shrinking demographics and resilience of labor markets, among other factors.
• In the United States, consumption and employment appear to be holding up better than expected under the tightening of monetary policy, and a recession that was previously forecast for early 2024 is likely to be avoided.
• In Europe, the slowdown is not as sharp as it is in China, but the manufacturing sector continues to be affected by weak trade with Asia and increased costs, and while services have held up better—especially those linked to tourism—they are also pointing toward a rapid deceleration.
• Both the Fed and the ECB have likely reached their interest rate peaks, but are now focusing—successfully, it seems—on convincing agents and markets that these levels will hold for quite some time.
• A soft landing can be expected for the global economy in the coming quarters, with very similar global growth in 2023 and 2024 (2.9% and 3%, respectively). There will be a need for some normalization of growth and inflation—and, later, of interest rates—in the face of the many structural challenges that lie ahead.

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