As 2024 draws to a close the Great Normalisation (as we had termed it) of falling inflation, progressive cuts in policy rates and trend-like global growth, is now in doubt.

Global growth is falling and is substantially below trend, yet 2023 has proven surprisingly resilient with the US economy managing to circumvent a much touted recession.

The landscape will shift in the coming year, with a number of trends reversing course and markets taking on new direction. Growth and inflation are expected to be materially lower, with a global recession in the months ahead, corporate profits will be less and margins compress, while policy rates are expected to moderate following record hikes this year.

Societies have shown resolve and ingenuity in adapting to the pandemic. Medical science has astonished, while a remarkable combination of monetary and fiscal initiatives resurrected economies in a way and on a scale few thought possible. However, imbalances and opacity now prevail, meaning 2022 needs a shift in focus back to basics.

The misery inflicted by the COVID-19 pandemic defined the passing year, accelerating trends and distorting imbalance yet further. Vaccine development marks an inflection point, giving hope that some semblance of normality will return and allowing plans to be made with spending and investment to follow. 2021 brings great expectations, though the path ahead will be arduous.

As central banks try to avoid economic stall speed and fight the crosswinds of trade uncertainty, manufacturing contraction and political turmoil, it’s time to fasten seatbelts and prepare for what could be a bumpy landing for the global economy and financial markets.

2019 is likely to be the ebb tide of the economic cycle rather than its demise, with slowing global growth, benign inflation and low bond yields. However, the year will host a number of unpredictable but critical political and geopolitical events, creating choppy waters for investors and policymakers to navigate.

2018 is expected to mark high tide in terms of the global expansion, with all boats being lifted as growth exceeds trend. Robust earnings and still generous liquidity provisioning should sustain investor enthusiasm. The biggest challenge is likely to be central bank policy as the focus shifts to tapering stimulus despite inflation missing targets.