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A mild global slowdown with less synchronized growth and inflation dynamics is expected by BofA Securities, they reported their Thursday report of The Global Thinker.
While inflation risks are present and the global central banks are likely to keep rates high for longer, the U.S. is expected to continue to lead growth and control the pace of interest rates globally.
When it comes to GDP growth, it is expected it decrease from 2.1% to 1.1% in the next year, and to 1.3% in 2025. CPI inflation in the U.S. is expected to reduce from 4.2% to 3.2% in 2024 and to 2.2 in 2025, according to BofA Global Research.
Japan has “the big growth and inflation surprise, with implications for global rates,” the report said.
GDP growth in Japan is 2.1% in 2023 and it is expected to reduce by 1.2% in 2024 and stay the same in the next year. Similarly, CPI inflation is expected to reduce from 3.1% to 2.7% in 2024 and 1.6% in 2025.
CPI inflation growth in China, however, is on the rise. Currently at 0.4%, it is expected to increase by 1.8% in 2024 and 2.1% in 2025. GDP growth is 5.1% this year, and it is expected to reduce to 4.8% in 2024 and stay the same in 2025.
The country “is suffering a confidence shock and the government needs to come up with a comprehensive plan to stabilize expectations,” the report said.
Europe’s GDP growth remains unrecovered at 0.5%, but it is expected to increase by 1.3% in 2025. Its CPI inflation markets show that in 2023, it is at 5.7%; in 2024 it is projected to decrease to 2.7%, and in 2025, to 1.5%.
For emerging markets, GDP growth is at 4.1% and it is projected to stay relatively the same, at 4.2% in 2024 and 4.1% in 2025. CPI inflation is expected to reduce from 6.2% to 6% in 2024 and 4.4% in 2025.
“But Brazil, Mexico and India will likely keep outperforming, while ASEAN [countries are] being impacted by China,” the report said.
China continues to fight deflation.
