2024年全球经济展望：增长缓慢不确定性高（英）-ACCA-2024.1

2024

GLOBAL

ECONOMIC

OUTLOOK

–SLOW

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Copyright©January2024bytheAssociationofCharteredCertifiedAccountants(ACCA).Allrightsreserved.UsedwithpermissionofACCA.Contactinsights@

forpermissiontoreproduce,storeortransmit,ortomakeothersimilarusesofthisdocument.IntroductionThisisaninauguralpublicationwhichwe

hopewillhelpyouandyourstakeholdersnavigatethemany

challengesandrisksintheglobaleconomyintheyearahead.

We

intendtoproduceitannuallyinthefutureand,

hence,

wouldgreatlyappreciateany

thoughtsorfeedbackyoumay

have

onit.Inanattempttotryanddifferentiateitsomewhatfromthemanyotheroutlookpublicationsproducedaroundthistimeofyear,

weincludesummariesofinterviewswithsevenchieffinancialofficers(CFOs)fromacrosstheglobe.Theyprovidedtheirbottom-upperspectivesfromthecorporatelevelonhowtheyseetheprospectsfortheworldandtheirregionsandcountriesin2024.InSection1,wediscusstheprospectsfortheglobaleconomyandkeycountriesin2024,aswellassomeofthemajorrisks.InSection2,wehighlightanddiscussthekeyriskeventstowatch,inayearpackedfullofelectionsaroundtheglobe.InSection3,wehighlightthreekeytrendswewillbecloselyfollowinginthecomingyear:i)furtherbackslidingbygovernmentsonpoliciesintendedtoachievethegreentransition;ii)risinggeoeconomicfragmentation;andiii)developmentswithartificialintelligence(AI).Finally,inSection4wepublishsummariesofinterviewswithsevenCFOs.3Executive

summaryTheglobaleconomylookssettogrow

slowlyonceagainin2024,

anddownsiderisksremain.Thelaggedimpactofpastmonetarytighteningcouldleadtoaneven

morepronouncedslowingingrowth,

andgeopoliticalrisksremainveryheightened,

whilethebusypoliticalcalendaraddsasizeableextradegreeofuncertaintyandpotentialvolatility.U.S.growthislikelytoslowfrom2023,butthechancesoftheFederalReserve(Fed)pullingoffasoft-landinglookbetterthanevennow.

GrowthwillremainweakintheeuroareaandUKamidrestrictivemonetarypolicyandtighterfiscalpolicy,butshouldstillbemoderatelypositive.TherecoveryinChinaremainsquitetentative,andpolicymakerswilllikelyhavetomateriallystep-uppolicysupportin2024iftheywanttoachievegrowthsimilarto2023.Meanwhile,growthinIndiaissettoremainrobust,anditislikelytobethefastest-growingmajoreconomyonceagainin2024.Inadditiontocloselymonitoringtheusualebbandflowofeconomicandfinancialmarketsdatathroughouttheyear,wewillalsobepayingparticularlycloseattentiontothreekeytrends:i)furtherbackslidingbygovernmentsonpoliciesintendedtoachievethegreentransition;ii)risinggeoeconomicfragmentation;andiii)developmentswithartificialintelligence(AI).Thefirsttwocouldbeparticularlyinfluencedbypoliticaldevelopmentsthroughouttheyear.

Forthelast,wewillbeonthelookoutforanyearlysignsthatwideradoptioncouldbebeginningtoprovideamuch-neededboosttoproductivitygrowthinglobaleconomies.Inparticular,asgenerativeAIcontinuestodevelop,moreaccessiblemodelscouldincreasethediscoveryofnewandbetterapplications.Thisyearhasanextraordinarilybusypoliticalcalendar.

AkeyfocusforbusinessesandinvestorswillbetheU.S.electioninNovember.

Inwhatislikelytobeaverytightrace,pollsinkeyswingstatescurrentlygiveformerPresidentTrump

aslightadvantage.Avictoryfortheformerpresidentcouldhavemajorimplicationsforinternationaltrade,geopoliticsandthegreentransition.Therearealsoelectionsinothereconomicallyandgeopoliticallyimportantcountries.InIndia,PrimeMinisterModilookssetforanotherfive-yearterm,whileintheUK,theoppositioncentre-leftLabourPartylooksoncoursetoreturntopower.

InEurope,far-rightpoliticalpartieslooksettoperformwellinEuropeanParliamentaryandGermanregionalelections.InSouthAfrica,theAfricanNationalCongress(ANC)ishighlylikelytoremainthelargestpartybutisatriskoflosingitsparliamentarymajorityforthefirsttimesincetheendofApartheid.To

supportoureconomicanalysis,wealsointerviewedsevenCFOsfromacrosstheglobeinvarioussectors,togainabottom-upperspectiveonhowbusinessleadersseetheyearahead.Ingeneral,therewasafeelingofcautionabout2024,amidthechallengingglobaleconomicbackdropandgiventhegeopoliticaldevelopmentsandelectionsinmanycountries.Somebusinesseswerenaturallylessimpactedbycyclicaleconomicdevelopments,butanumberwereaffectedby,oratriskfrom,structuralchangesrelatedtotrade,andsupplychainissues.MostwereexperimentingwithAIandothertechnologiesintheirbusinesses,whilesomenoteddifficultyinattractingtalent,givenchangingwaysofworking.Onenotedhowglobalwarminghadrecentlyimpactedhisbusiness.4Section

1:ProspectsfortheGlobaleconomyin2024Theglobaleconomyperformedbetterthanexpectedin2023,

avoidingthemajordownturnthatmanyobserversfeared.Itbenefitedfromthesharpfallincommoditypricesfromtheir2022peaksandthecontinuedrecoveryofglobalsupplychainsandnormalisationofservicesectors,whileeconomiesprovedmoreresilientthanexpectedtotheaggressiveincreasesincentralbankinterestrates.Thisprobablyreflectsthesupporttoconsumerspendingfromexcesssavingsbuiltupduringthepandemic,aswellasthefactthatmanyhouseholdsandfirmshadpreviouslylockedinlowinterestrates.Headlineinflationhasfallenbacksharplyinmostcountriesacrosstheglobeoverthepast12months,andcoreinflationhasalsocomedownmateriallyinmany.Ofthetwomajoradvancedeconomies,headlineinflationiscurrently3.4%intheU.S.and2.9%intheeuroarea–welldownfromrecentpeaksofaround9%and11%respectively.Nevertheless,amidtherecentrisesinheadlineinflationinbothcountriesinDecember,ratherstubbornservicesectorinflation(seeChart2),andanelevatedriskofsupplyshocksamidthecurrentgeopoliticalbackdrop,itcouldberiskyforthecentralbankstodeclareimminentvictoryintheirbattlesagainstinflation.Indeed,accordingtoglobalaccountantswhorespondedtoourGECSsurvey,concernsaboutcostsremainelevatedbyhistoricalstandards(ACCA/IMA,2024).Withoutamorematerialeasinginjobmarkets,thereremainsasignificantriskthatthelastmileforcentralbanksingettinginflationsustainablybacktotheirtargets,couldprovetobethehardest.Therewas,nonetheless,stilladivergenceinperformanceamongthemajoreconomies.TheU.S.andIndiaperformedstrongly,theChineserecoverywasdisappointing,whilegrowthwasweakintheeuroarea.Overall,theglobaleconomyisstillthoughttohavegrownbywellbelowitsannualaverageofrecentdecades.TheWorldBankhasestimatedthatin2023therewasanexpansionofjust3%(seeTable

1),similartotheOECD’s

2.9%estimatefromNovember(OECD2023).Business-relatedsurveystypicallypointedtoslowingglobaleconomicmomentumas2023progressed.InourGlobalEconomicConditionsSurvey(GECS)(ACCA/IMA,2024),confidenceamongaccountantsandfinancialprofessionalsgloballyhasfallengraduallyforthreesuccessivequarterssinceQ1(seeChart1),whilethecloselywatchedJ.P.

MorganGlobalCompositePurchasingManagers’Index(PMI)hasfallenquitemarkedlysinceitspeakinthespring,althoughithasimprovedslightlyinrecentmonths(S&PGlobal2024a).Acrosssectors,themanufacturingPMIwasin,orquitecloseto,contractionaryterritorythroughmuchof2023(S&PGlobal2024b),whichisreflectedintheweaknessinglobaltradegrowth,butitwastheslowingoftheservicesectorPMIthatdrovemostofthefallintheCompositeindex.Despitethedeclines,thesurveysarenotindicativeofamajorglobaldownturnatthepresenttime.CHART

2:

Servicesectorinflation199019941998200220062010201420182022Source:ASRLtd./LSEGDatastream(2024)Amidtheimprovinginflationbackdrop,financialmarketshavepivotedtopricing-inamaterialamountofinterestratecutsthisyearinthemajoradvancedeconomies,withsomeobserversevenexpectingcutsasearlyasthecurrentquarter.

AthisDecemberpressconference,FedChairJeromePowelladoptedasurprisinglydovishstance,andtheSummaryofEconomicProjectionssuggestedthatthecommitteeexpectsthreeinterestratecutsin2024(FederalReserveBoard,2023),albeitstillaroundhalfthenumbercurrentlyexpectedbyfinancialmarkets.TheEuropeanCentralBank(ECB)andtheBankofEngland(BoE)adoptedmorehawkishposturesinDecember,

althoughECBPresidentChristineLagardehassubsequentlysuggestedthatmonetaryeasingcouldbegininthesummer.

Reflectingthechangeinmarketexpectationsaroundcentralbanks,particularlytheFed,therehasbeenquiteamaterialeasinginglobalfinancialconditionssincelateOctober,

with10-yearU.S.Treasury

yieldsfallingsharply,theS&P500risingstrongly,andtheU.S.dollarweakeninginbroadtradeweightedterms.CHART

1:

GECSglobalbusinessconfidence2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023Source:ACCA/IMA(2024)52024GLOBALECONOMICOUTLOOK–SLOWGROWTH,HIGHUNCERTAINTY

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SECTION1:PROSPECTSFORTHEGLOBALECONOMYIN2024Focusingontheprospectsfor2024,globalgrowthislikelytocomeinmateriallybelowitsaverageonceagain,withabroadlysimilarpaceofexpansionaslastyear.

TheWorldBankforecastsanincreaseof2.9%inglobalgrossdomesticproduct(GDP)(seeTable

1),whiletheOECDexpectsaslightlyslowergainof2.7%(OECD2023).Growthislikelytobewellbelowitsaverageinadvancedeconomiesas,despitethelikelihoodofsomemonetaryeasing–probablybeginninginthesummer,

centralbanksmaintainrestrictivemonetarypoliciestoensurevictoryintheirbattlesagainstinflation.Meanwhile,fiscalpoliciesalsolooksettobecontractionaryinthemajoradvancedeconomies,whilepoliticaluncertainty,amidmajorelectionsthisyear,

aswellaselevatedgeopoliticaltensions,couldweighonconfidenceandspending.THERISKSTOGLOBALGROWTHREMAINTOTHEDOWNSIDETHISYEAR,AMIDAWORLDCHARACTERISEDBYSIGNIFICANTUNCERTAINTYANDPOTENTIALVOLATILITY.Theriskstoglobalgrowthremaintothedownsidethisyear,amidaworldcharacterisedbysignificantuncertaintyandpotentialvolatility.Theseincludeamajorriskthatthelaggedimpactofglobalmonetarytighteningcouldleadtoaharderlandingintheadvancedeconomies,and/ormajorfinancialstresses.Thisriskisperhapsnotquiteasheightenedaslookedlikelyinlateautumn,amidthesubsequentsomewhatlooseninginglobalfinancialconditions,arisingchanceofasoftlandingfortheU.S.economy,andgivenwhatlookslikeapivottowardsmonetaryeasingbyadvancedeconomies’centralbanksthisyear.

Nevertheless,ifinflationremainsstubborn,forcingamajorrepricingoffinancialmarketexpectationsforinterestrates,thenthemagnitudeofthisriskwouldincreaseagain.TABLE

1:

World

Bankeconomicforecasts20223.32.53.74.23.01.93.47.22023E32024E2.9World*AEs1.541.2EMs3.9EMXCChinaU.S.3.25.22.50.46.33.54.5Meanwhile,geopoliticalriskshavebecomeevenmoreelevatedinrecentmonths,witharisingriskofabroaderescalationoftheconflictintheMiddleEast.TheattacksbyHouthirebelshavealreadyfuelledasharpdeclineinshippingthroughtheSuezCanal(seeChart3),andeventsintheMiddleEastclearlyhavethepotentialtocausealargeincreaseinenergypricesandglobalshippingcosts.Thiswouldclearlybeverydamagingforbusinessandconsumerconfidence,andwouldgreatlycomplicatecentralbanks’taskofgettinginflationsustainablydowntotheirtargets.Elsewhere,theconflictbetweenRussiaandUkrainecontinuestoexacerbatethegeopoliticalsituation.1.6EuroareaIndia**0.76.4Source:WorldBank2024*‘World’isGDPgrowthbasedonPurchasingPowerParitycalculationmethodology.AEs=AdvancedEconomies,EMs=Emergingmarketanddevelopingeconomies,EMXC=EMsexcludingChina**TheIndianumbersarebasedonfiscalyears.Similarly,growthinemergingeconomiesisgenerallyexpectedtobebelowitsaverage,althoughakeyfactorbehindthisistheslowergrowthintheChineseeconomythantheheadypaceofpreviousdecades.GrowthinemergingeconomiesexcludingChinaisactuallyexpectedtoimprovemodestlyin2024fromthatof2023,withtheWorldBankforecastinggrowthof3.5%in2024versus3.2%in2023.Clearly,anumberofemerginganddevelopingcountrieswillremainunderpressure,givenslowgrowthintheadvancedeconomiesandtightglobalfinancialconditions,butanumberofimportantcountriesarelikelytoregisteraprettysolidperformancein2024.Forexample,theWorldBankforecastsgrowthof6.4%,4.9%,4.1%,2.6%and2.6%inIndia,Indonesia,SaudiArabia,PolandandMexico,respectively.ThestartofpolicyeasingbytheFedshouldprovehelpfulforemergingeconomies,aswouldanyfurtherweakeningintheU.S.dollar.CHART

3:

GlobalshippingcapacitypassingthroughtheSuezCanal20192020202120222023Source:ASRLtd./LSEGDatastream/IMFPortWatch(2024)62024GLOBALECONOMICOUTLOOK–SLOWGROWTH,HIGHUNCERTAINTY

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SECTION1:PROSPECTSFORTHEGLOBALECONOMYIN2024Politicalriskwillalsobeparticularlyheightenedin2024amidsuchanextremelybusyyearforelections(seeSection2:Keyeventsin2024–averypoliticalyear).AkeyfocusfortheglobaleconomyandfinancialmarketswillbetheU.S.election,withare-runofPresidentBidenversusformerPresidentTrumpseeminghighlylikely.Theresultwilllikelybeveryclose,withopinionpollsinswingstatescurrentlysuggestingthattheformerpresidenthasaslightadvantage.AvictoryforDonaldTrumpcouldhavemajorimplicationsforglobaltrade,geopoliticsandthegreentransition.Upsideriskstotheglobaleconomyin2024couldcomefromcontinuingrapidimprovementsininflation,pavingthewayforquiteanearlyandsignificanteasingofmonetarypolicybycentralbanks.Ofcourse,thatcouldalsorisksowingtheseedsofhigherinflationin2025andbeyond.Philadelphia2023),whichisbroadlysimilartotheWorldBankforecast(WorldBank2024).DespitethelikelihoodofapivottomonetaryeasingbytheFed,monetarypolicyislikelytoremainrestrictiveamidelevatedrealinterestrates.Fiscalpolicyalsolookssettodragongrowththisyear(Brookings2023).Meanwhile,thedwindlingofexcesssavingsbuiltupduringthepandemicandslowingjobsandwagegrowthshouldhelptoslowconsumerspending.Nevertheless,itisnowlookinglikeabetterthanevenchancethattheFedmayachieveasoftlandingfortheeconomy,amidtheeasinginfinancialconditionsinrecentmonths(seeChart5),theimprovementintheinflationbackdrop,andgiventhelikelihoodofsomeinterestratecuts.Accordingtoour2023Q4GlobalRisksSurvey(ACCA/IMA,2024),economic-relatedrisksremainedfirmlyinfirstplaceamongriskpriorities,althoughsuchconcernshadeasedslightlyfrompreviousquarters(seeChart4).Economic-relatedriskswererankedinfirstplaceby21%ofrespondentsworkinginfinancialservices,andby29%ofthoseworkinginthecorporatesector.

Overall,talentretentionremainedinsecondplacefollowedbyregulatorychange.Geopoliticalriskshaverisensignificantlyuptheranksofriskprioritiessince2022Q4.CHART

5:

U.S.

Weighted

averagelendingrates%Turning

tothekeycountries,afterexpandingrobustlyin2023,theU.S.economyislikelytoslowmateriallyin2024.AccordingtothelatestSurveyofProfessionalForecasters,theU.S.isexpectedtogrowby1.7%in2024(FederalReserveBankof1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024Source:ASRLtd./LSEGDatastream(2024)CHART

4:

Top-ranked

riskprioritiesin2023,

accordingtoaccountancyandfinancialprofessionals%Q4Q3Q2302520151050Economicinflation

Talent

scarcity/Regulatory/compliance/legalInternationalandgeopoliticalinstabilityTechnology/data/cybersecurityMisconduct/fraud/reputationaldamageClimatechange/relatedregulation

includingcrypto,/itssocialandeconomicimpactsCurrency,Logistics/supplychaindisruption/Withdrawaloffiscalmeasures/highertaxation/recession/interestratesskillsgaps/employeeretentiondigitalassetsandFXsupplyshortagesSource:ACCA/IMA(2024),ACCA/IMAGlobalRiskssurvey(2023)</gb/en/professional-insights/global-economics/GECS_q4_2023.html>72024GLOBALECONOMICOUTLOOK–SLOWGROWTH,HIGHUNCERTAINTY

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SECTION1:PROSPECTSFORTHEGLOBALECONOMYIN2024Intheeuroarea,theeconomicbackdropremainsratherbleak,withtheeconomycontractingby0.1%inQ3andbeingflatinQ4.Tightmonetarypolicyhasweighedheavilyonbanklendingandhousingmarkets,andthesoftglobaleconomyhashurtexports.ECBestimatesalsosuggestthatfiscalpolicyislikelytobemeaningfullymorecontractionaryin2024.Thelocomotivefortheregion’s

economy,Germany,isstruggling,astheriseinenergycostssinceRussia’s

invasionofUkrainehasweighedonitsall-importantmanufacturingsector,

ashastheweakChineseeconomicrecoveryandthegrowingcompetitionfromitsascendantelectricvehicleindustry.Onapositivenote,theregion’s

jobsmarketremainstight(seeChart6),andrealincomegrowthhasturnedpositive.Thisshouldprovidesomesupporttotheconsumer,

whilethebeginningofmonetaryeasingwillalsoprovidesomerelieftotheeconomy.Growthoverallin2024willbeweak,butshouldbemoderatelypositive.AccordingtotheECB’s

latestSurveyofProfessionalForecasters,economistsexpectedanexpansionof0.6%in2024(ECB2024),slightlylowerthantheWorldBank’s

estimateof0.7%(WorldBank2024).IntheUK,theeconomycontractedby0.1%inQ3,andanothersoftreadingseemslikelyinQ4.Growthislikelytobeweakin2024amidtightmonetarypolicyandcontractionaryfiscalpolicy,withthefreezeinincometaxandnationalinsurancethresholds.Thatsaid,withanelectionlikelyintheautumn,thegovernmentwillusewhateverroomisavailableinitsupcomingMarchBudgettotryandreducethemagnitudeofthefiscaldragsomewhat.Furthertaxcutsseemhighlylikely.Growthwilllikelybemoderatelypositivein2024,improvinggraduallyastheyearprogressesamidpositiverealincomegrowthandthelikelihoodofsomemonetaryeasing.InNovember2023,theBoEandOfficeforBudgetResponsibility(OBR)forecastgrowthof0%and0.7%respectively,in2024(BoE2023;OBR2023)whiletheaverageofindependentforecastscompiledbyHMTreasury

inJanuarywas0.4%(HMTreasury

2024).China’s

recoveryafterexitingitsZeroCOVIDpolicieswasweakerthanexpectedin2023,asproblemsintheall-importanthousingmarket,depressedconfidenceandweakexportsallweighedontheeconomy.Therecentdatahasbeenquitemixed,butthegovernmentstillachieveditsGDPgrowthtargetof‘around5%’for2023withanexpansionof5.2%.Withtherecoverystillquitetentative,problemswithhousing,risingfearsofdeflationandlargeexternalrisks,furthermeasurestosupporthousing,monetaryeasingandincreasedfiscalstimulusseemlikelyin2024.Butthegovernmentstillseemskeentoavoidtheexcessivestimulusthathastypicallyoccurredinthepast.Withless-favourablebaseeffectsthisyearthanlast,itwillbedifficultforthegovernmenttoachievepastgrowthagain.InNovember,

theOECDforecast2024growthof4.7%,andtheWorldBankexpectsanexpansionof4.5%(OECD2023;WorldBank2024).Developmentsinthehousingmarketandthespilloversfromthesetothewidereconomyandfinancialmarketsremainamajordownsiderisk.CHART

6:

Euroareaunemploymentrate%2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

2022Source:EurostatFinally,theIndianeconomywasthebestperformingofthelargeeconomiesin2023andisoncourseforanotheryearofstronggrowthin2024

.TheNationalStatisticalOfficeexpects1ONAPOSITIVENOTE,THEREGION’SJOBSMARKETgrowthofover7%infiscalyear2023-24,whilethegovernoroftheReserveBankofIndiasuggestedthatheseesgrowthof7%infiscalyear2024-25–strongerthanWorldBankestimates(ShaktikantaDas2024).Reflectingthebullishbackdrop,thestockmarkethassurgedclosetorecordhighs,andthepurchasingmanager’s

surveysremainupbeat(S&PGlobal2024c;2024d).Theeconomyislikelytocontinuetobenefitfromstronginfrastructurespendingbythegovernment,solidservicesectorexports,andthediversificationofinternationalsupplychains.AModivictoryintheelectioncouldalsoreduceuncertaintyandspursomestrengtheninginprivatesectorinvestment.Developmentswithdomesticfoodprices,andinternationalenergyprices,remainkeyrisks,asalways.REMAINSTIGHTANDREALINCOMEGROWTHHASTURNEDPOSITIVE.THISSHOULDPROVIDESOMESUPPORTTOTHECONSUMER,WHILETHEBEGINNINGOFMONETARYEASINGWILLALSOPROVIDESOMERELIEFTOTHEECONOMY.1Note,forecastsfortheIndianeconomyareusuallymadeonafiscalyearbasis.Forexample,anannualforecastforcalendaryear2024,willbebasedonthefiscalyear2024/25.ThiswillrunfromthebeginningofApril2024totheendofMarch2025.8Section

2:Key

events

in2024–avery

politicalyear2024isanextremelybusyandimportantyearonthepoliticalfront,

withtheworld’s

fourlargestdemocracies,

India,

theU.S.,

IndonesiaandPakistan,

amongothers,

goingtothepolls(seeChart7).CHART

7:

Key

eventcalendarfor2024FEBRUARY8February:PakistanGeneralElection14February:IndonesiaPresidentialElection1March:IranLegislativeElectionMARCH5March:ChinaNationalPeople’s

Congress6March:UKBudget10March:PortugalLegislativeElection17March:RussiaPresidentialElectionAPRIL10April:KoreaLegislativeElectionlikelyApril–May:MAYIndiaGeneralElectionJUNE2June:MexicoGeneralElection6–9June:

EuropeanParliamentElection9June:BelgiumFederalElectionJULYAUGUSTbetweenMay–August:SouthAfricaGeneralElectionlikely

2024:ChinaThirdPlenum26July–11August:Paris2024OlympicGamesSeptember:GermanyRegionalElectionsSEPTEMBEROCTOBERNOVEMBERDECEMBERbetween

September–October:SriLankaPresidentialElectionlikely

Autumn2024:UKGeneralElection5November:U.S.PresidentialElection11–24November:COP29,Baku,Azerbaijan18–19November:G20meeting,BrazilSource:National/InternationalsourcesandWikipedia92024GLOBALECONOMICOUTLOOK–SLOWGROWTH,HIGHUNCERTAINTY

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SECTION2:KEYEVENTSIN2024–AVERYPOLITICALYEARSincetheGlobalFinancialCrisisin2008–9,populistpoliticians,partiesandpolicieshavegenerallybeenontherise,particularlyinadvancedeconomies,exemplifiedbytheUK’s

decisiontoleavetheEUandDonaldTrump’s

victoryinthe2016U.S.Presidentialelection.Thefirst-placefinishbyfar-rightcandidateGeertWildersintherecentDutchgeneralelectionsuggeststhatvoterconcernsaboutthecostofliving,immigrationandinternationaltrademayprovideafertilegroundforpopulist,anti-establishmentpoliticiansoverthecomingyear.AbsolutelykeyfromaglobaleconomicandfinancialmarketperspectivewillbetheU.S.Presidentialelectionon5November.

Are-runof2020withPresidentJoeBidenpittedagainstformerPresidentTrump

lookshighlylikely.PresidentBiden’s

personalapprovalratingsareverylow,

andformerPresidentTrump

hassmallleadsinbothnationalpollingaveragesand,importantly,inpollsinmostkeyswingstates(seeChart8).CHART

8:

U.S.

presidentialelection–pollingaverages%BidenTrump5048464442403836NationalArizonaGeorgiaMichiganNevadaPennsylvaniaWisconsinSource:RealClearPolling(2024a)National=RCPaverage10thDecember-16thJanuary,States=RCPaverageSeptember-January.Thenumbersdonotsumto100aspollingforothercandidateshasbeenexcluded.ABSOLUTELY

KEYFROMAGLOBALECONOMICANDFINANCIALMARKETPERSPECTIVEWILLBETHEU.S.PRESIDENTIALELECTIONON5NOVEMBER.102024GLOBALECONOMICOUTLOOK–SLOWGROWTH,HIGHUNCERTAINTY

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SECTION2:KEYEVENTSIN2024–AVERYPOLITICALYEARThiswouldperhapssuggestthattheformerpresidentisaslightfavouriteinaverytightrace,althoughthereisenormousuncertaintyabouttheresultinanationdeeplydividedpolitically.Indeed,developmentswiththejobsmarket,inflation,gaspricesandinterestratesarealsolikelytobeimportantdeterminantsofPresidentBiden’s

chances,aswellasthesituationintheMiddleEast.IndicationssuggestthatasecondTrump

termcouldleadtotougherpoliciesontradeandimmigration,andsomerowingbacko