Mid-Year Outlook

Mid-Year Outlook

An update on the Economic & Market Outlook is provided, gauging developments and projecting how the subsequent 12 months are likely to unfold.

An uneasy calm

Despite Covid becoming a distant nightmare to most of us, the impact on the global economy remains profound. Taking stock at the mid-point of the year highlights how the excesses and distortions are still being digested, in a period that we would characterise as the ‘great normalisation’. An economic rebalancing is underway, with inflation and now interest rates falling and every data release commanding attention. It seems all too easy to look past war, geopolitical conflict and political change and embrace each tick lower in inflation as the key to prosperity and well-being. Financial markets are in rude health, with stocks up and credit spreads tight, and the US tech goliaths are vying for the title as the world’s most valuable company. While global growth and financial market prospects look to be good, an uneasy calm is present as fragilities linger in the shadows.

Mid-Year Outlook 2024: An uneasy calm

Video, 08:03min

Taking stock at the mid-point of the year, we are in a period that we would characterise as ‘the great normalisation’, with growth rebalancing, inflation moving lower and interest rates in decline. While global growth and financial market prospects look to be good, an uneasy calm is present as fragilities linger in the shadows. Get our take on whether this is sustainable, or if some chill winds are building.

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In part 1 the MSME team members discuss their views and forecasts for the economic environment across regions in the year ahead and detail how they came to their conclusions. In part 2 they share their thoughts on financial markets, focusing on regional and asset class variations expected in the year ahead.

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Mid-Year Outlook 2023

Working harder to stay standing

The mid-year outlook by our Market Strategy and Macroeconomics team cites a number of powerful cross currents at play in global markets. Economic growth has been resilient so far this year, due to strong services activity and buoyant consumer spending helped by full employment in many regions. But a deeply persistent inverted U.S. yield curve signals scepticism about the enduring strength of conditions.

Mid-Year Outlook publications past years

Mid-Year Outlook 2024
An uneasy calm
Taking stock at the mid-point of the year, we are in a period that we would characterise as ‘the great normalisation’, with growth rebalancing, inflation moving lower and interest rates in decline. While global growth and financial market prospects look to be good, an uneasy calm is present as fragilities linger in the shadows. Get our take on whether this is sustainable, or if some chill winds are building.
PDF
Mid-Year Outlook 2023
Threading the needle
The first half of the year saw a number of cross currents at play, yet we close the period with economic growth having been resilient, headline inflation plunging, a systemic banking crisis averted, and equity markets back in bull-market territory.
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Mid-Year Outlook 2022
Twin Peaks
As we hit the midpoint of the year, the tempered optimism for the global economy that we had six months ago has been undermined by war in Europe and mass Covid-related lockdowns in China.
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Mid-Year Update 2021
As good as it gets
The global recovery has been remarkable on many levels, not least in terms of the power of science and the resilience of societies. Mass vaccination and highly supportive fiscal and monetary policy has catapulted economic activity to a level few thought possible at the start of the year.
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Mid-Year Update 2020
Phoenix from the flames
A global pandemic and self-imposed lockdowns lead to the sharpest contraction in global growth since the Great Depression. Yet a truly profound policy response has prevented a health and economic crisis becoming a financial crisis. However, the recovery will still leave a large hole in global output and a greater dependency on support mechanisms.
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Mid-Year Update 2019
Tug of war
Slowing global growth encounters a new round of monetary stimulus. Most financial assets soared in the first half of the year as investors priced in an era of renewed monetary stimulus against a backdrop of benign inflation.
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Mid-year update 2018
Shifting Sands
Economic conditions are robust and growth is expected to remain above trend, while financial markets are in good shape, with upside for equities. The global landscape has become more fragile, however, as shifting sands are evident. From increasing populism and mounting trade tensions, to the spread of financial tightening, risks have risen.
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Mid-year update 2017
Not the time for complacency
A broad-based and deepening global economic expansion is panning out largely as we had thought. Inflation, however, has been weaker than expected, and with underlying vulnerabilities still evident inmost regions, the current cyclical upswing needs to be a catalyst for change rather than a time for relaxation.
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