the world economy is achieving equilibrium a post-pandemic
The world economy is achieving equilibrium a post-pandemic equilibrium, which is a sign of effective measures that will allow improvements worldwide.
According to the U.S. consulting firm, the global economy is reaching a post-pandemic equilibrium, in what they have called a “landing” that is reaching several advanced economies.
According to the consultancy, the global economy is coming into balance, led by the G20, due to effective policy maneuvering, improved supply-demand balances and good fortune, such as mild winters in Europe.
The latest report from U.S. consultancy Moody’s on the global macroeconomic outlook for 2024 is stark.
The the world economy is achieving equilibrium a post-pandemic equilibrium with a steady normalization in economic activity in major advanced and emerging markets.
Against this backdrop, a soft landing appears to be within reach for several advanced economies due to effective policy maneuvering, improved supply-demand balances and good fortune, such as mild winters in Europe.
In addition to a strong U.S. economy (negative Aaa), sustained and stronger-than-expected post-pandemic recoveries in several emerging market countries offer a constructive growth outlook.
Another indicator comes from the U.S. Federal Reserve (Fed) and the European Central Bank (ECB), both of which are likely to begin cutting rates in the second quarter.
Geopolitical risks and inflation remain as potential threats to the outlook.
In addition, the consultancy expects the global production and trade outlook to evolve along with geopolitical changes.
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the world economy is achieving equilibrium post-pandemic equilibrium, projection
In this regard, the world economy is achieving equilibrium, detailed in a report with three major projections:
G-20 economies would collectively expand 2.4% in 2024 and 2.6% in 2025, up from 2.9% in 2023. While the advanced G-20 economies will slow from 1.8% in 2023 to 1.5% in 2024 and 1.6% in 2025. G-20 emerging market countries are estimated to grow by 3.8% this year and 3.9% in 2025, then 4.7% in 2023.
The world’s major central banks will begin normalizing monetary policy in due course, provided inflation remains on a downward path.
Moody’s maintains the expectation that the Fed will cut the federal funds rate by a cumulative total of 100 basis points in 2024, bringing it to 4.25%-4.50%, and cut it further in 2025.
The ECB is also expected to begin policy normalization in the second quarter. As the Bank of Japan (BoJ) seeks to normalize monetary policy and move away from negative interest rate policy and yield curve control, soft inflation could delay the process.
Key macroeconomic and financial risks that remain on the consultant’s radar include inflation, uncertainty about the level of terminal interest rates, and vulnerability points within the financial sector.
Domestic economic policies, trade policies and technology transfers will also be shaped by foreign policy.
