An economic prediction favored by many individuals is the further moderation of inflation. This can be supported through the intense initial decline in global consumer price inflation from late 2022 stuck in 2023, reflecting a bounce back in energy prices and sticky core inflation, particularly for the service industry. The downward trend has continued and is likely to be seen in both domestic and international markets this year.
Another highly supported prediction is that growth in North America and Western Europe will fall back short of its potential. This is not anything new as it is consistent with the goal of bringing inflation back to target rates. Weaker annual real GDP growth rates are forecast across all the largest regions in 2024 compared with 2023. Global annual real GDP is forecast to grow at a slower pace in 2024 - 2.1% compared with an estimated 2.8% in 2023 - although strength in some regions including Asia Pacific will help to pivot a global hard landing.
Furthermore, emerging markets will get an earlier start on easing cycles. The central banks that are already easing generally enhanced their monetary policies relatively early, keeping inflation expectations stable and second-round effects in check. According to the S&P Global Intelligence, "In Latin America, for example, inflation rates have fallen relatively rapidly, while labor market conditions are generally not tight." Easing cycles that are already under way in countries like Chile, Brazil and Peru are predicted to continue in the period ahead, with rate cuts also forecast in Mexico in the first half of 2024.
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