The curtain of 2023 has fallen as strikingly as its debut, bringing with it a completely revolutionized economic landscape. According to the latest report on the economic situation published by Ref Searches, Despite the moderate economic growth initial recession fears did not materialize. L'inflation and interest rates initially on the rise, they are now decreasing. Sheuncertainties for 2024 they concern the confirmation of the decline in inflation and the possibility of rate cuts by central banks. There Federal Reserve opened up to rate cuts, while the European Central Bank is more cautious, even if market expectations suggest a change in 2024.
Raw material prices in retreat
In the panorama of the raw material, a retreat in prices is observed, driven by the economic cycle. The normalization of the European energy market is underway, with greater diversification of supply sources and increased use of renewable energy. Also the oil market has experienced a decline, while non-energy commodity prices are generally lower than the highs of the last two years.
The contraction of metal prices, linked to the slowdown in global industrial activity, particularly in China, due to the contraction of the real estate market, is one of the most significant elements. However, the normalization of energy commodity prices contributes to reducing production costs in agricultural markets.
The global ballet of trade
In 2023, there has been a gradual resolution of issues in the supply chains, which had caused tensions during the pandemic. World trade flows have normalized, and international shipping costs have contracted significantly, although there have been some recent problems in maritime freight rates due to attacks on ships in the Suez Canal.
Positive signs on the job market
The situation of the job market is showing signs of returning to normality. Despite slower economic growth, unemployment rates remain low in many countries, reflecting job growth during 2023. The recovery in labor supply and international migration flows is helping to meet labor demand.
For 2024: falling inflation and uncertain prospects
The inflation, which was a concern in early 2023, is showing signs of easing. Forecasts for 2024 converge towards lower rates compared to the last two years, but although the financial markets point to a slowdown in inflation, a divergence persists between the hypothesis of a "soft landing" and more significant cuts in interest rates. Furthermore, the risk of price tensions or a "hard landing" cannot be completely ruled out.
In summary, 2024 starts with less inflation risk, but the economic prospects remain Incerte, with the possibility of surprises in the financial markets and in the decisions of central banks.
