Global growth forecast at 3.1% in 2024, driven by US profits and AI demand, but regional disparities persist amid inflation risks.
The S&P 500 has surged to record highs on AI-driven demand and US profit strength, leaving strategists cautioning that equity valuations now offer limited bargains. Bond yields have climbed as investors price in prolonged higher interest rates to combat persistent inflation above central bank targets.
Global growth is projected at 3.1% this year, down slightly from 2023, with the US and AI-linked Asian economies like Korea leading. The eurozone contracted in Q1 and is expected to grow just 0.4% in 2024, while China’s retail sales hit a 40-month low in April, signaling deeper structural challenges.
Energy-driven inflation remains a key risk, keeping the door open for further monetary tightening in developed markets. The divergence between resilient US growth and stagnant eurozone performance is set to widen regional asset dispersion.