In our first Monthly Macro Outlook video, Paul Diggle, Chief Economist, discusses the divergent fortunes of the US and Chinese economies this year and how they may play out.

Key points:

  • US inflation is moderating because the US labour market is cooling benignly.
  • But delayed effects of US monetary policy to kick in and household savings running down.
  • Expect mild US recession in 2024 (but soft landing also possible).
  • In China, weak household consumption due to consumers not tapping into excess savings and a beleaguered real estate sector are weighing on growth
  • But Chinese policy is supportive, and we believe we will see the benefits. We don’t subscribe to the more pessimistic ‘Japanification’ assessment of the country’s long-term outlook.
  • There’s great uncertainty, posing upside and downside risks to China.

For more detail, please read our full 2023 (Q4) Global Economic Outlook

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