Key points:
- US inflation is moderating because the US labour market is cooling benignly.
- But delayed effects of US monetary policy to kick in and household savings running down.
- Expect mild US recession in 2024 (but soft landing also possible).
- In China, weak household consumption due to consumers not tapping into excess savings and a beleaguered real estate sector are weighing on growth
- But Chinese policy is supportive, and we believe we will see the benefits. We don’t subscribe to the more pessimistic ‘Japanification’ assessment of the country’s long-term outlook.
- There’s great uncertainty, posing upside and downside risks to China.
For more detail, please read our full 2023 (Q4) Global Economic Outlook