Economic Forecasts for 2024: Analysis, Trends, and Market Impacts

2024-01-21 13:43:07

Published on January 21, 2024 at 2:43 p.m.

For 2024, the economic forecasts are far from flamboyant. Indeed, economists agree to forecast modest GDP growth: +1.2% in the United States, +0.6% in the euro zone, +1.1% in Switzerland and +4.5% in China. Furthermore, underlying inflation is still high, at +3.9% in the United States and +3.4% in the euro zone. In addition, budget deficits are worrying investors, particularly in the United States where a deficit of 5.9% is expected for 2024. This gloomy picture is further clouded by continuing geopolitical tensions, such as the Russia-Ukraine war, the Israel-Hamas conflict, and recent unrest in the Red Sea disrupting navigation.

However, another crucial factor influences the markets above all: central banks. In fact, after tightening monetary conditions at the end of 2022 and in 2023, the American Federal Reserve (Fed) increased its interest rates from 0 to 5.4% in sixteen months. During this period, the performance of bonds and stocks has been disappointing and so the question becomes what the Fed’s policy will be in 2024.

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