What's on the horizon for the global economy?

Our weekly updated overview highlights the key releases of global economic market data from around the globe and provides an economic outlook for 2023 by region.

  • Our Week Ahead podcast explores the key themes driving global markets next week
  • Our Global Economic Markets Data Calendar shows upcoming events happening over the week
  • We provide an outlook overview region by region
Global Markets Data Calendar

Our view in a nutshell

Japan

  • Japan’s economy will likely remain on a recovery path, exceeding potential after contracting in Q1 2024.
  • This year’s shunto wage hikes have proved materially higher than last year's, increasing the stickiness of inflation through 2025.
  • The BOJ decided to reduce JGB purchases after the July MPM, with the details to be determined at that MPM.
  • We expect the BOJ to hike rates in October 2024, with a risk of it being frontloaded to July.

Asia

  • We expect GDP growth to continue improving in 2024, due to a sustained goods cycle upturn and steady domestic demand.
  • Growth divergences exist: Taiwan, India and Singapore are likely to outperform, while China and Thailand could disappoint.
  • Inflation is closer to the trough but should remain within target. Rising freight rates are a risk to goods price inflation.
  • Monetary policy divergence is likely. We expect the RBI, BOK and BSP to cut, BI and CBC to hike and the rest to stay on hold.
  • Korea: With more resilient consumption, we expect the BOK to deliver only one 25bp cut in October 2024.
  • India: Resilient growth and higher food inflation support extended policy pause, with 75bp of rate cuts from October 2024.
  • Indonesia: Populist measures of the incoming government raise fiscal risks while current account deficits continue to widen.
  • Australia: We expect below trend growth, rising unemployment, gradually easing inflation and rate cuts from November 2024.

China

  • Beijing is finally headed in the right direction towards ending the housing crisis, as its policy focus has shifted to home delivery.
  • But this is a daunting task, patience is needed as it takes time for Beijing to fully prepare.
  • The economy is undergoing some forms of rebalancing, as exports and domestic demand diverge.
  • We still see drags from fading pent-up demand, property fallout, local government debt control and investment in “green” sectors.

United States

  • Gradual disinflation and slowing growth momentum will likely encourage the Fed to begin an easing cycle.
  • We expect the Fed to cut rates by 50bp this year (September and December), followed by quarterly rate cuts in 2025.
  • Disinflation has resumed. We expect moderating wage growth and slower rent inflation to continue to weigh on service prices.
  • Job gains will likely continue to moderate, but there are few signs of labor-market stress or widespread layoffs.
  • Risks of inflation reacceleration and a higher neutral rate could lead to a more hawkish Fed in 2024 and 2025.

Euro Area

  • We expect an ongoing recovery in GDP in 2024 with growth recovering to 0.4% q-o-q by year-end.
  • We see euro area core inflation still above target through 2024-2025 but with services inflation starting to slow from elevated rates.
  • The ECB cut rates by 25bp in June 2024. We forecast another 125bp of cuts at a quarterly pace until September 2025.
  • The ECB began full roll-off of its APP portfolio redemptions in July 2023. PEPP tapering is expected to begin in July 2024.

United Kingdom

  • There was a short, modest recession in H2 2023. After a bounce back in Q1 2024, we expect a slow recovery in GDP thereafter.
  • Upside risks: low unemployment, strengthening surveys. Downside risks: past monetary tightening and below-average confidence.
  • Lower energy prices, base effects and slowing momentum should help pull inflation down, though service prices are sticky.
  • We stick with August for the first cut but thereafter see quarterly cuts to a terminal rate of 3.5% in 2026.

For more information read our weekly report here.

Contributor

    Aichi Amemiya

    Aichi Amemiya

    Senior US Economist

    George Buckley

    George Buckley

    Chief UK & Euro Area Economist

    Ting Lu

    Ting Lu

    Chief China Economist

    Kyohei Morita

    Kyohei Morita

    Chief Economist, Japan

    Euben Paracuelles

    Euben Paracuelles

    Southeast Asia Economist

    David Seif

    David Seif

    Chief Economist for Developed Markets

    Rob Subbaraman

    Rob Subbaraman

    Head of Global Macro Research

    Sonal Varma

    Sonal Varma

    Chief Economist, India and Asia ex-Japan

Disclaimer

This content has been prepared by Nomura solely for information purposes, and is not an offer to buy or sell or provide (as the case may be) or a solicitation of an offer to buy or sell or enter into any agreement with respect to any security, product, service (including but not limited to investment advisory services) or investment. The opinions expressed in the content do not constitute investment advice and independent advice should be sought where appropriate.The content contains general information only and does not take into account the individual objectives, financial situation or needs of a person. All information, opinions and estimates expressed in the content are current as of the date of publication, are subject to change without notice, and may become outdated over time. To the extent that any materials or investment services on or referred to in the content are construed to be regulated activities under the local laws of any jurisdiction and are made available to persons resident in such jurisdiction, they shall only be made available through appropriately licenced Nomura entities in that jurisdiction or otherwise through Nomura entities that are exempt from applicable licensing and regulatory requirements in that jurisdiction. For more information please go to https://www.nomuraholdings.com/policy/terms.html.