Advanced economies have been confusing investors with mixed performance. Market participants are pleased about robust growth in the US economy whereas they fret about doom and gloom in European countries. Analysts share the viewpoint that most economies in the eurozone are already in the stagnation phase or are on the verge of a recession.
What a nuisance! What lies behind the malaise in the European economy? Oddly, governments and monetary authorities are making joint efforts to tackle economic woes but to no avail. Nevertheless, market participants hope to discover the green shoots of recovery in the not-too-distant future.
Analysts at insurance company Swiss RE caution about a considerable slowdown in the global economy next year. The global economy is losing momentum on the back of aggressive monetary tightening by major central banks and signs of a slowdown in 2023. Such risks are worsened due to the military conflict in the Middle East. The deviation will persist in 2024: the US economy will extend its growth whereas the EU economy will slide downhill from stagnation to recession, Swiss RE analysts say in a report.
According to their estimates, real GDP in the global economy could rise by 2.2% in 2024. Global economic growth will recover to 2.7% in 2025 thanks to easing inflationary pressure and the effect of rate cuts adopted by central banks worldwide. Earlier, Swiss RE predicted economic growth of 2.5% in 2023.
Experts warn that both inflation rates and interest rates in developed economies will remain elevated for a longer time than expected, at least 10 years ahead. Analysts at Swiss RE anticipate that the global CPI will slip to 5.1% in 2024 and will decelerate to 3.4% in 2025. They expect patchy inflationary pressure around the world.