Q3 2024 Global Outlook: Calm on the surface

China is having a weak Q2 after a strong first quarter and the second half of the year should also be disappointing, with growth below 4% (q/q seasonally adjusted annual rate). On the other hand, the euro area is finally seeing a cyclical recovery after two years of stagnation. India has been an outperformer for a couple of years and looks set to grow at around 7% in 2024 as well.

However, one of the biggest reasons for a solid macro backdrop continues to be the world's largest economy, the United States. Jobs growth is trending at levels similar to the past year, and so are domestic final sales. Granted, there is some evidence that lower-end consumers are feeling a pinch, and small businesses have been gloomy for a while. But there has also been a massive expansion in household wealth since the start of COVID, in both equities and home prices. Moreover, the US tech sector continues to spend aggressively on its machine learning and AI build-out. We expect the US to expand 2.5% this year, right in line with 2023.