2024 consensus views

It is informative to review analysts’ expectations for macroeconomic developments and central bank policy decisions as these are important for financial markets. We do so in this report by studying the evolution of Bloomberg's monthly economic surveys for the US, Eurozone, Japan, UK, Switzerland, and China.

Chart 1a shows the median analyst’s expectations for average annual GDP growth in 2024. Since the beginning of 2023, growth expectations have generally declined. However, it is notable that forecasts of US GDP growth have strengthened since the summer. Nonetheless, US GDP growth is expected to be lower in 2024 than in 2023.

Chart 1a

Source: Bloomberg. Data as of December 11, 2023.

Chart 1b

Source: Bloomberg. Data as of December 11, 2023.

Chart 1b shows expectations for 2024 inflation generally rose in 2023. This increase is most evident with regard to Japan. The outlier is China, for which 2024 inflation expectations have been falling since spring. Even though inflation is expected to be lower in 2024 than in 2023, it is expected to remain well above central banks' targets, except in Switzerland.

The implication is that there will be room for interest rate cuts in these economies next year (see Chart 2a).¹ Although the absolute level of interest rates expected at the end of 2024 has increased in recent months, consensus forecasts point to four 25 basis points policy rate cuts in the US, three in the eurozone and UK, and one in Switzerland by the end of next year.² In contrast, the Bank of Japan is expected to end its negative interest rate policy, though rates are only expected to rise by 10 basis points to 0%.

Chart 2a

Source: Bloomberg and EFGAM calculations. Data as of December 11, 2023.

Chart2b

Source: Bloomberg and EFGAM calculations. Data as of December 11, 2023.

Despite market expectations of rate cuts, the stance of monetary policy is still expected to be restrictive. Short-term real rates, calculated by subtracting inflation expectations for 2024 from the policy rate, would still be around 2% at the end of next year. It is also notable that monetary policy expectations in the US have become more restrictive than elsewhere since the summer, as expectations for US GDP growth were revised higher (see Chart 2b).

In conclusion, the consensus of market analysts predicts a slowdown in GDP growth and inflation in 2024 in major economies. Consistent with the moderation of the economic cycle, central banks are expected to cut interest rates while maintaining restrictive monetary policy at least until the end of next year.

¹ Bloomberg does not conduct a survey on Chinese rates.
² For the eurozone, the refinancing rate is shown, currently at 4.50%.