“Turning tides in growth, inflation and monetary policy will generate opportunities for investors to rotate from a more defensive to a more constructive stance during the year.”
Ten CIO convictions for 2024
1. Turning tides in global growth, with US recession in sight for H1 2024
Assuming that the Middle East crisis remains contained, we expect a weaker global economic outlook, mainly driven by the slowdown in Developed Markets (DM). The US will tiptoe into a recession in H1, as tight financial conditions begin to bite on consumption and business sentiment. Eurozone growth remains mildly positive, thanks to healthy household disposable income and despite extraordinary fiscal measures being lifted. In Japan, growth should moderate but stay above potential.
2. Emerging Markets (EM) resilient but with higher fragmentation, Asia winner in investment flows
A great reallocation, friend/near-shoring, supply chain de-risking, as well as the net zero or technological transition/transformation should continue to direct investments towards Asia. India’s economic prospects remain bright amid strong domestic demand and investments. In China, the structural shift and deleveraging will go ahead, with GDP growth slowing to a 3/3.5% target in 2025.
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