November 22, 2023

The Forward View – Global: November 2023

Global growth resilient in Q3 but set to slow going into 2024


  • Our global measure of consumer price inflation slowed once again in September (following a modest acceleration in August). Inflation in advanced economies was softer, with consumer prices rising by 4.2% yoy (down from 4.5% yoy in August) – the lowest rate of growth since September 2021.
  • Recent AE inflation trends have boosted market confidence that most major central banks are at the end of their tightening cycle. Market pricing on 20 November allows for almost no chance of a further in this cycle rate rise by the US Federal Reserve, the Bank of England and the European Central Bank. That said, we continue to think that their near-term bias is to the upside, particularly if progress on inflation stalls.
  • Growth in major AEs was divergent in Q3, with strong growth in the US but declines in the Euro-zone, UK and Japan. Only modest growth is expected for Canada. Business surveys suggest the divergence in growth over the last year between the US – and to a lesser extent Japan – and Western Europe is narrowing.
  • Business surveys of emerging markets generally softened in October, with the EM composite PMI dropping to its weakest reading since December 2022. Recent months have seen an uptick in China’s export volumes, with exporters aggressively cutting prices to attract purchases.
  • Modest revisions to the outlook for the United States, Europe and Japan were not sufficient to change our overall outlook for the global economy. We continue to expect global growth of 3.0% in 2023, before slowing to 2.6% in 2024, with a modest recovery to 3.0% in 2025. This outlook remains below the long-term average of 3.4% (which was recorded between 1980 and 2022).
  • Various geopolitical factors could continue to influence the outlook for global growth. These include the ongoing Russia-Ukraine war, conflict in the Middle East, tensions between the United States and China and the US Presidential election in 2024.

For further details, please see The Forward View Global (November 2023)