CHARLOTTE, North Carolina (ICIS)–Inflation is falling faster than expected across most economies, leading to a turning point in central banks’ two-year battle against surging prices. This turning is now fueling expectations that central banks could pivot to cutting interest rates in 2024.
The economies of both China and Europe have lost momentum. Falling oil and other commodity prices are indicative of a sluggish global economy.
China’s recovery has been hampered by its property sector, high debt, high youth unemployment and soft export markets. The demographic profile is aging rapidly, which is hindering consumer spending.
China’s manufacturing Purchasing Managers’ Index (PMI) hovers around breakeven levels and 2024 activity will likely be slower than in 2023. Other Asian PMIs have been mixed.
Euro Area manufacturing has been in contraction for 17 months and Europe’s economy appears to be in recession. Europe is also aging rapidly.
Turning to the Americas, the pattern is mixed. The Manufacturing PMI for Canada remained in contraction during November and Brazil manufacturing also remains in contraction. Mexico’s manufacturing has rebounded as the nation’s manufacturing sector is being aided by re-shoring.
Published by: www.icis.com
Kevin Swift
29-Dec-2023
