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Outlook 2024: A year of hard choices

Global Economy

The global economy showed more resilience in 2023 than had been expected, with leading economies avoiding a recession. However, growth is expected to slow in 2024. Inflation has peaked in most economies but remains above central bank targets. Geopolitical tensions and the risk of further supply shocks continue to loom large.

Overall, the report expects global GDP growth of 2.4% in 2024, down from an estimated 3% in 2023. Advanced economies will struggle more, with growth of just 0.8% compared to 1.5% in 2023. Emerging markets are forecast to hold up better at 3.6% growth versus 4% in 2023, helped by India where GDP expansion could accelerate.

Inflation is projected to moderate globally, averaging 2.7% in 2024. But deflationary forces will not be uniform – some services prices may fall significantly while goods costs remain subdued. Commodity prices also pose upside risks given geopolitical tensions.

Macro Risks and Opportunities

Several risks could derail the macro outlook in 2024. A recession remains possible if monetary tightening is not carefully calibrated. Sovereign debt sustainability is a growing concern, especially for highly indebted countries. Geopolitical flashpoints like Taiwan or the Middle East could trigger new supply shocks. Unknown black swan events are also a perpetual threat.

However, not all is doom and gloom. Corporate balance sheets are strong, and innovation continues unabated which could boost productivity. Consumers have built up excess savings during the pandemic. If data surprises to the upside, rate cuts may come sooner than expected. Geopolitical tensions could also ease. Overall, investors should prepare for volatility but opportunities will emerge.

United States

The US economy has defied expectations by avoiding recession in 2023. However, growth is expected to slow to 1% in 2024 as rate hikes filter through. Inflation will continue moderating towards the Fed’s 2% target, possibly allowing rate cuts in late 2024 if the economy cooperates.

Risks include high debt levels, a tight labor market, and effects of rate rises on housing. The November 2024 presidential election also raises uncertainty. Overall, the Fed is unlikely to push rates much higher but a “higher for longer” stance is probable. Selectivity will be key for investors.


The eurozone flirted with recession in 2023 and growth is pegged at a meager 0.3% in 2024. Inflation will retreat from current highs but remain above the ECB’s 2% target. Financial conditions are tight and debt sustainability concerns linger for some countries like Italy.

Monetary policy is seen normalizing but not tightening further. Recession risks are elevated given growth dependence on exports and a potential energy crunch. Opportunities may emerge from select cyclicals and peripheral markets if risks recede. Defensives like utilities remain attractive.

United Kingdom

The UK faces stagflationary pressures with weak growth of 0.4% expected in 2024 and inflation persisting above 3%. Rate hikes have yet to filter through housing and credit. Amid fiscal tightening, the economy risks dipping into recession.

Political uncertainty also looms from the expected late 2024 general election. UK stocks offer an attractive dividend yield but selectivity is key given macro headwinds. Defensives and domestic cyclicals are preferred over internationally exposed names.


After disappointing in 2023, Chinese growth is seen steady at 4% in 2024. Inflation will remain subdued while monetary policy stays accommodative. COVID controls continue to ease but the property sector slump and weakening global demand pose challenges.

Geopolitical tensions are a wild card. Opportunities exist in select areas benefiting from ongoing reforms, like healthcare, new energy and technology. But macro and regulatory risks warrant a cautious approach overall for international investors.

Tuning to the Macro Beat

The report analyzes historical relationships between macroeconomic momentum indicators and financial market returns. It finds soft economic data and consumption have typically driven risky assets higher, while hard data confirms conditions for safer bonds.

This framework can help identify turning points and sectors responsive to the macro cycle. In the current environment of slowing growth and moderating inflation, defensive sectors and bond proxies are preferred over cyclicals. Diversification is also emphasized to hedge various macro risks.

Asset Class Views

Fixed Income

After a difficult 2023, fixed income presents opportunities. Developed market sovereign bonds offer a hedge given elevated macro volatility. Investment grade credit remains preferred to high yield given spread expansion risks. Duration extension can capture upside if rates retreat. Emerging market debt warrants caution.


Equities still offer better long-term returns than bonds. However, a defensive positioning is recommended given stretched valuations and slowing earnings growth. Regions like the UK and sectors like utilities, consumer staples and energy screen attractively valued and well positioned for a slowing cycle. Selectivity is key.

Private Markets

Illiquid alternatives like private equity, real estate, infrastructure and private credit can boost risk-adjusted returns through the illiquidity premium. They also provide diversification benefits given low correlations to public markets. Time diversification across vintages is important given macro volatility.

Other Assets

Within alternatives, hedge funds that offer downside protection through different market environments are preferred. Gold remains the sole recommended commodity given its portfolio hedging properties. Cash balances are seen as prudent given high uncertainty.

India Outlook

India’s growth story remains resilient supported by robust domestic demand, exports, and government infrastructure spending. However, private capex will need to pick up significantly to sustain over 6.5% GDP growth.

Inflation should moderate while the currency and macro stability provide support. Equities are favored, with selective additions on corrections, while fixed income offers opportunities from duration extension. Defensives, domestic cyclicals, and alternative assets are recommended given election risks.


Navigating 2024 will test investors’ resolve given conflicting macro signals and cross-currents. A well-diversified portfolio with a long-term focus, flexible to adjust to opportunities that arise, is recommended. Defensive positioning recognizes near-term risks while allocation to structural growth areas protects against longer-term dislocations. Selectivity, risk management, and patience will be important virtues in the year ahead.