North African cities are forecast to experience some of the fastest rates of employment and population growth over the long term. GDP growth is also forecast to be near the top of the global pack, just trailing behind sub-Saharan Africa.
Sanele Mjikane
Middle Eastern cities are forecast to experience some of the fastest rates of employment and population growth over the long term. However, GDP growth is forecast to be middle of the global pack.
After the sharp falls in eurozone inflation recently, a series of rate cuts this year by the European Central Bank is now the consensus view. However, monetary policy transmission takes time and we don’t think growth will receive much of a boost from monetary loosening until 2025, though there’s potential for some upside surprises.
Sub-Saharan cities will lead the way for GDP growth, but similarly strong demographic changes will limit gains in GDP per person, reaffirming the region’s position at the lower end of the development spectrum.
The outlook for European residential real estate is improving. The prospect of lower interest rates means house price corrections are probably coming to an end, while still-stretched affordability will support rental demand.
Disruption to shipping through the Red Sea now looks likely to keep transport costs elevated at least for the next few months. We estimate this will result in a peak lift of 0.3ppts to eurozone headline and 0.4ppts to core inflation in 2024, with the brunt of the impact coming in H2.
Generous subsidies to apprenticeships introduced in 2020 have pushed up French employment numbers and will continue to if the policy is maintained. The key is to improve the efficiency of the scheme, which would enhance France’s public debt sustainability and its growth potential. Simply cutting the current subsidies for budgetary reasons would lower output levels without improving the country’s long-term debt dynamics.
This Research Briefing provides an overview of the most consequential elections being run in Africa this year: South Africa’s general election, presidential and parliamentary elections in Mozambique, and presidential races in Senegal, Ghana, and Rwanda.
The attacks on container ships by Houthi militants have, once again, revealed the underlying fragility of the international supply chains upon which the global economy relies. The longer the attacks go on and the more ocean freight carriers decide to avoid transit through the Suez Canal, the greater the disruptive effects will end up being.
We have identified five key challenges Africa faces in transitioning to renewable energy at the scale needed to combat climate change and meet the continent’s climate commitments. Perhaps the central challenge is the prevailing socio-economic conditions on the continent, which offer little wiggle room for governments to divert fiscal revenue to sustainability-related initiatives. With most African economies being relatively undiversified and many reliant on fossil fuel exports, the global transition to sustainable practices threatens economic losses if not mitigated ‒ emphasising the need to diversify economic activity.
We assume the disruption to shipping caused by maritime attacks on commercial vessels in the Red Sea will be relatively short-lived and the recent spike in sea freight prices will reverse. While there will be near-term impacts for some firms and sectors, these won’t be enough to shift our baseline economic or inflation forecasts to any meaningful extent.
We were a little surprised that Fed officials had not pushed back harder against market expectations for aggressive rate cuts this year, but perhaps they wanted to let the minutes from the December meeting of the Federal Open Market Committee do the work.
Following a year of subdued global growth in 2023, we think a further softening of economic conditions is likely next year, before activity gathers pace in 2025-26. In this context, we forecast the world’s 1,000 major cities combined will achieve GDP growth of just 2.4% per year over 2024- 26, marking not only a sizeable slowdown from the expected outturn in 2023, but also compared to the 5-year trend of 3.0% per year achieved prior to the pandemic.
This study investigates both the entrepreneurial and the small to medium-sized business (SME) landscapes across the North African region with a specific focus on the role being fulfilled by women.
Weak demand, profit margin compression, easing pipeline pressures, and abating supply bottlenecks mean we see core goods inflation strongly coming down in 2024, supporting our below-consensus inflation forecast.
The Gulf Cooperation Council (GCC) region will expand less than we initially thought this year, but growth will improve in 2024 and outpace most advanced and emerging economies. There are four themes that shape our above-consensus 2024 GDP growth forecast for the GCC of 3.9%.
One month into the Israeli-Palestinian conflict, cruise operators have responded swiftly to geopolitical disturbances in the Middle East by modifying or cancelling itineraries.
The rapid surge in interest rates will continue to weigh on the Nordic economies next year with little external support, but it’s not all gloom with inflation easing and some pockets of strength. We think four themes will be key in charting the outlook for Nordic economies in 2024:
Next year holds promise for the dawning of a new industry in Africa and somewhat of a commercial renaissance taking place in Kenya – East Africa’s economic anchor. Our watchlist for 2024 also foregrounds major currency devaluations in Ethiopia and Egypt and a strong probability of coups d’état in Cameroon and Tunisia. We expect support for the African National Congress (ANC) to drop below 50% in South Africa’s general elections, but that coalitions with smaller parties will allow the ruling party to cling to power.
We forecast no rate cuts by the Fed up to and including the July meeting, while the market prices 72bps. We therefore see value in paying July FOMC-dated Fed Funds swaps, currently trading at 4.61%.
