Investment Institute
Weekly Market Update

Take Two: IMF raises global growth forecast; Eurozone inflation falls

  • 22 April 2024 (3 min read)

What do you need to know?

The International Monetary Fund (IMF) raised its global growth forecast to 3.2% for 2024, slightly higher than its January forecast of 3.1%, followed by 3.2% growth in 2025. It cited fading energy price shocks and a rebound in labour supply, supported by immigration in many advanced economies, but warned the resilience of the global economy overall “masks stark divergence across countries”. The IMF also expects global inflation to fall to an annual average of 5.9% in 2024 and 4.5% in 2025, from 6.8% in 2023. AXA IM forecasts global GDP growth to fall to 3.0% in 2024 from 3.2% last year, then rise to 3.1% in 2025.

Around the world

Eurozone annual inflation was confirmed at 2.4% in March, down from 2.6% in February, reinforcing expectations that the European Central Bank will begin cutting interest rates in June. Slowing wage growth and lacklustre demand have put downward pressure on inflation despite an increase in services prices. The bloc’s core inflation, which excludes food, energy, alcohol and tobacco, fell to 2.9% from 3.1%. Meanwhile, UK inflation eased to 3.2% from 3.4%, the slowest pace in more than two years, while in Japan, the headline rate slowed to 2.7% from 2.8% and core inflation nudged down to 2.6% from 2.8%.

Figure in focus: 5.3%

China’s economy grew by 5.3% year on year in the first quarter (Q1) of 2024, exceeding market expectations of 4.4% and ahead of Q4’s 5.2%. The strong performance reflected supportive government policy and an increase in public investment, especially state-owned enterprises, while private investment stayed sluggish. AXA IM now expects GDP growth of 5.0% for the year, in line with the government’s growth target. Disappointing retail sales and industrial output figures however underlined the slower domestic demand. We continue to expect a 50-basis-point cut in the reserve requirement ratio in the coming months.

Words of wisdom

Solar grazing sheep: Flocks of sheep are playing a role in the renewable energy market by grazing on the grass that surrounds solar panels, in places that are difficult for lawnmowers to reach. The number of sites using this method of natural upkeep has increased 10-fold over the last two years, according to the American Solar Grazing Association. It estimates that around 80,000 sheep now graze across 100,000 acres at sites in 27 US states. The US solar energy industry expanded at its fastest-ever pace last year, increasing capacity by 51% from 2022, boosted by the 2022 Inflation Reduction Act.

What’s coming up?

On Tuesday, flash estimates for April Purchasing Managers’ Indices are issued for Japan, the Eurozone, UK and US. On Wednesday Germany’s closely watched Ifo Business Climate Index is published. Thursday sees France update the market on unemployment data while a first estimate for US Q1 GDP growth is released. On Friday, the Bank of Japan convenes to set interest rates and also publishes its quarterly economic outlook.


    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.