This report provides an in-depth analysis of the current economic landscape in major economies, such as the USA, UK, China, India, Japan, and key alliances such as G7, BRICS, and ASEAN. Additionally, it offers forecasts for the future economic outlook.

1. Global Economic
Outlook 2024
Challenging Economic situation for the world ahead
Scholaride

2. 01 Global snapshot
Contents
02 Country and regional outlooks
03 Meet the team and explore our resources

3. Global Snapshot

4. Global growth is mixed with leaders like India and China offset by struggling economies
facing negative growth and inflation.
Rescources: Trading Resources
1. Growth Trends and Leading Economies:
India and China are leading the way in terms of GDP growth, with India experiencing an impressive 8.4%
growth rate and China following closely with a 5.2% growth rate. Both nations are managing to maintain
robust economic growth despite facing global headwinds. This can be attributed to various factors, such
as a strong emphasis on domestic demand, a thriving manufacturing sector, and the continuous
expansion and improvement of their services sectors.
2. Negative Growth and Inflation:
On the other end of the spectrum, countries like the United Kingdom and Germany have unfortunately
experienced negative GDP growth, both contracting by -0.2%. While dealing with low growth or
economic contraction, these nations are also facing varying levels of inflation. Germany's inflation rate
sits at 2.5%, while the UK is experiencing a higher inflation rate of 3.4%. Several factors could be
contributing to these negative growth rates and inflation levels. Political uncertainty, weakened global
trade, and internal structural challenges within these countries may have played a role in their economic
slowdown.
3. Stable Growth, Mixed Inflation:
The United States and Canada are showing signs of stable GDP growth, with the US growing at a steady
rate of 3.1% and Canada growing at a more modest pace of 0.9%. However, inflation rates for these two
developed economies differ, as the US faces a slightly higher inflation rate of 3.2%, while Canada's
inflation rate sits at 2.8%. Both the United States and Canada must manage their economies carefully,
aiming for a balance between stable growth and moderate inflation.
4. Low Inflation:
Countries like China, Japan, and Italy are experiencing low inflation rates of 0.7%, 0.0%, and 0.8%
respectively. Various factors can result in low inflation, such as weak demand, limited wage growth, and
declining commodity prices. If these conditions persist, there could be a risk of deflation, which might
prompt central banks to intervene with stimulus measures designed to boost economic activity and
stabilize prices. Policymakers in these countries should closely monitor economic indicators and
implement appropriate measures to promote sustainable growth while maintaining price stability.
Year over year (y/y) percentage change in real GDP and Inflation
FY 24

5. In 2024, the global economy's resilience requires a multi-faceted approach to address talent gaps,
navigate geopolitical tensions, and manage inflation, fostering sustainable growth.
Rescources: McKinsey & Company
1) Economic Outlook for 2024: Navigating Uncertainty with Resilience
Amid lingering challenges, the global economy shows resilience with a projected 2.8% growth in 2024. Growth varies regionally; advanced economies like the US (1.6%) and eurozone
(1.2%) grow slower, while emerging markets like India (7.5%) and China (5.1%) lead. Key factors driving growth include recovering domestic demand, increased public investment, and
improving labor markets. Risks such as geopolitical tensions, supply chain disruptions, and climate-related challenges must be addressed for sustained progress. The Russia-Ukraine
conflict, political fragmentation, and climate change significantly impact the economy.
2) Labor Market Trends and Workforce Dynamics: Addressing Skill Gaps and Adapting to Change
In 2024, unemployment rates remain low in major economies: US (3.6%), eurozone (7.4%), UK (4.1%), and Brazil (7.5%). Labor market strength is crucial for economic growth, but
talent shortages and evolving workforce dynamics challenge organizations. Adapting to changing talent needs through reskilling, upskilling, and embracing flexible work options is
essential. Rapid technological change has created skill gaps, especially in digital literacy, data analytics, and emerging technologies. Organizations addressing these gaps will harness
innovation and drive growth. By 2030, demand for advanced tech skills may increase by 55%, requiring reskilling and upskilling.
3) Geopolitical Tensions and Trade Dynamics: Balancing Risks and Opportunities
In 2024, geopolitical uncertainties and trade dynamics will shape the global economy. Persistent trade disputes, supply chain disruptions, and political tensions can hinder global
economic integration. In 2022, merchandise trade volumes grew by 3%, slower than the 9.8% growth in 2021. Navigating these risks is crucial for a stable global economic
environment.
Opportunities arise from reshoring, nearshoring, and diversifying supply chains, enhancing resilience and sustainability. A McKinsey survey revealed that 93% of supply chain leaders
aim to increase supply chain resilience. By investing in regional and diverse supply chains, businesses can mitigate risks related to geopolitical tensions and single-source
dependencies.
4) Inflation and Central Bank Policy: A Delicate Balancing Act
Inflation is expected to ease gradually in 2024, yet central banks face continued challenges in managing inflation and supporting economic growth. The US Federal Reserve and other
central banks will likely adopt a more balanced approach in their monetary policies, with gradual interest rate hikes to prevent overheating the economy while fostering growth. Central
banks must strike a delicate balance between controlling inflation and maintaining economic stability.
Policymakers must also consider the impact of monetary policy on employment and financial markets. The International Monetary Fund has emphasized the need for clear
communication and forward guidance from central banks to minimize policy surprises and reduce financial market volatility.

6. GDP Growth Projections for Major Developed Economies: 2024-2025
Rescources: Trading Resources
Y/y GDP growth
2024–25F

7. Growth in major developed economies stems from robust demand labor markets;
tackling global risks, supply chain issues, and inflation fosters sustained progress.
Rescources: IMF, World Bank and OECD
US: In 2024, the United States economy is projected to experience a moderate growth rate of 1.6% amidst an uncertain global economic landscape. Several key factors contribute to
this anticipated growth, including a gradual yet steady rebound in domestic demand, which will continue to drive consumption and investment within the country. Additionally,
sustained public investment in infrastructure and other critical sectors is expected to bolster economic activity and create new opportunities for businesses and workers alike.
Furthermore, the US labor market is anticipated to remain resilient throughout 2024, with unemployment rates projected to stay low at 3.6%. This relative stability in employment
levels is expected to support consumer confidence and maintain a solid foundation for continued economic progress.
Canada: In 2024, Canada's economy is projected to grow at a moderate pace of 0.9%, influenced by both domestic and global factors. Key contributors to this anticipated growth
include resilient consumer demand, ongoing public investment, and a stable labor market, with unemployment rates expected to hover around 5%. However, potential risks from
geopolitical tensions, supply chain disruptions, and climate-related challenges must be effectively addressed to ensure sustained economic progress. While Canada's inflation rate is
projected to ease throughout 2024, the Bank of Canada will need to navigate a delicate balance between controlling inflation and supporting economic growth. Gradual interest rate
adjustments may be implemented to maintain stability and encourage investment across various sectors.
Euro area: The euro area economy is projected to experience moderate growth of 0.8% in 2024, as key factors contribute to this forecast. Resilient consumer demand, continued
public investment, and a stable labor market with unemployment rates hovering around 7% serve as supportive factors for the region's economic prospects. However, potential risks
from geopolitical tensions, supply chain disruptions, and climate-related challenges must be effectively addressed to ensure sustained economic progress. While inflation rates in the
euro area are expected to ease throughout 2024, the European Central Bank (ECB) will need to carefully balance controlling inflation and supporting economic growth.
Japan: Japan's economy is projected to maintain a moderate growth trajectory of 1.1% in 2024, driven by factors such as resilient consumer demand, ongoing public investment, and a
stable labor market with unemployment rates remaining low at approximately 2.5%. However, potential risks stemming from geopolitical tensions, supply chain disruptions, and
climate-related challenges must be effectively addressed to ensure sustained economic progress. While inflation rates in Japan are expected to gradually rise throughout 2024, the
Bank of Japan (BOJ) will need to carefully balance controlling inflation and supporting economic growth.

8. GDP Growth Projections for BRICS Economies: 2024-2025
Y/y GDP growth
2022–25F

9. Economic forecasts for major developing economies indicate diverse trajectories,
necessitating policy adjustments to tackle unique challenges.
Rescources: IMF, World Bank and OECD
India: India's economy is projected to grow at a robust pace of 7.4% in 2024, driven by several key factors. Strong domestic demand, fueled by a large and growing consumer base, will
continue to be a major driver of growth. Additionally, sustained public investment in infrastructure and other critical sectors is expected to bolster economic activity and create new
opportunities for businesses and workers alike. The Indian labor market is anticipated to remain dynamic throughout 2024, with unemployment rates projected to stay at around 6.8%.
China: China's economy is projected to grow at a rate of 5.3% in 2024, driven by a combination of factors. Despite a gradual shift towards a more consumption-driven economy,
investment will continue to be a key contributor to growth, particularly in strategic sectors such as technology and infrastructure. Furthermore, the labor market is expected to remain
stable, with unemployment rates around 5.5%.
Latin America: Latin America's economy is projected to grow at a modest pace of 2.3% in 2024, with varying growth rates across subregions. Key factors driving this growth include
relatively stable domestic demand and gradual public investment in various sectors. The labor market is expected to maintain its stability, with unemployment rates hovering around
8%.
Indonesia: Indonesia's economy is expected to maintain a steady growth rate of 5% in 2024, driven by domestic demand and ongoing investment in various sectors. The country's
large and growing population, coupled with a burgeoning middle class, is a key driver of consumption and economic activity. In addition, the government's focus on infrastructure
development and efforts to diversify its economy are contributing to sustained growth.
Vietnam: Vietnam's economy is expected to sustain a strong growth rate of 6.3% in 2024, driven by robust domestic demand and ongoing investment across key sectors such as
manufacturing, agriculture, and services. The country's growing population and expanding middle class are fueling consumption and economic activity, while the government's
emphasis on infrastructure development and economic diversification is supporting long-term growth prospects.
Middle-East: Economic growth in the Middle East is projected to slow down in 2024, according to the latest reports and analyses from international organizations such as the
International Monetary Fund (IMF) and the World Bank. Various factors are weighing on activities, including geopolitical tensions, supply chain disruptions, and climate-related issues.
The IMF expects GDP growth in the region to decline from 2.0% in 2023 to 2.9% in 2024, with further variations among individual countries.

10. Four years after the onset of the pandemic, most major economies are above pre-
pandemic GDP levels but below pre-pandemic GDP growth trends
GDP Growth – Major Economies (Latest Quarter Results)

11. While Unemployment Rates is reducing in major economies, GDP growth has something
else to say
Unemployment rate
2014–23
Global growth rate
Pre-Pandemic Vs Pandemic Vs Post-Pandemic

12. Supply conditions will be an important driver of inflationary dynamics in 2024, and while
better balance between supply and demand is expected, risks will linger
Labor supply percentage change
January 2018–December 2022
Global Supply Chain Pressure Index
January 2016–December 2023
Global commodity and Food Index
January 2016–December 2023 (2016=100)

13. While ECB keeps it’s rates unchanged for quite sometime, it’s only in recent time that the
Fed has been following the same path
Euro area central bank interest rate
2016-24
US central bank interest rate
2016-24

14. Renewable energy investments are projected to contribute $6 trillion to global GDP by
2030, driven by increased solar and wind energy adoption and improved energy security.
Renewable Energy Capacity Added and Share in Global Energy Mix
January 2010 - December 2022
• A $2 trillion boost to global GDP by 2030 from renewable energy investments: According to a recent analysis by the International Renewable Energy Agency (IRENA), a significant
surge in investments in renewable energy could add an extra 1.1% to annual GDP growth over the next decade. A cumulative investment of $4.5 trillion in renewable energy
technologies by 2030 would result in a $2 trillion increase in global GDP, as per IRENA's moderate adoption scenario. This growth can be attributed to factors such as job creation
in the renewable energy sector, reduced energy costs, and improved energy security.
• A $3 trillion boost to global GDP by 2030 from large-scale solar energy adoption: The Solar Energy Industries Association (SEIA) and the National Renewable Energy Laboratory
(NREL) project that a rapid deployment of solar energy could contribute an additional $3 trillion to global GDP by 2030. This growth is expected to be driven by increased solar
panel installations, decreased greenhouse gas emissions, and enhanced energy access in remote regions. Solar energy's cost-competitiveness with traditional energy sources and
the growing demand for clean energy solutions are likely to drive this economic growth.
• A $1 trillion boost to global GDP by 2030 from the expansion of offshore wind energy: A study by the Global Wind Energy Council (GWEC) estimates that the worldwide
development of offshore wind farms could generate $1 trillion in economic benefits by 2030. This growth would be fueled by the expansion of offshore wind farms, the creation of
high-skilled jobs in manufacturing, installation, and maintenance, and a reduction in carbon emissions. Technological advancements and supportive government policies are
expected to play a significant role in promoting the adoption of offshore wind energy.

15. Country and
Regional Outlooks

16. Supply chain challenges persist in 2024, necessitating diversified strategies to mitigate impacts
from geopolitical conflicts, trade tensions, and pandemic-induced disruptions.
• In 2024, the global economy could face a range of potential issues related to the global
supply chain, such as trade tensions, geopolitical conflicts, and rising protectionism.
According to the World Trade Organization (WTO), the value of global merchandise trade
is expected to grow by 4% in 2023, but the ongoing risks and uncertainties may affect
this growth.
• The COVID-19 pandemic has already caused a 7.7% decline in global trade in 2020,
according to the WTO. The lingering effects of the pandemic, including disruptions to
supply chains and worker shortages, could persist into 2024, potentially impeding
economic recovery efforts.
• Geopolitical tensions between major economic powers, such as the US and China, could
continue to affect global trade and investment flows. In 2020, the US imposed tariffs on
approximately $400 billion worth of Chinese goods, leading to retaliatory tariffs from
China.
• According to the European Commission, uncertainties surrounding Brexit and the future
of the EU could also impact trade and investment in Europe, with the UK's departure
from the EU resulting in an estimated 2% reduction in the UK's GDP.
• In response to these challenges, the WTO emphasizes the importance of international
cooperation and trade facilitation measures to support global economic recovery. By
prioritizing the development of resilient and diversified supply chains, governments,
businesses, and consumers may need to adapt to new trade patterns and explore
alternative sources of supply.
Global Supply Chain Pressure Index
January 2016 – December 2023

17. U.S. labor market remains resilient in early 2024, with February unemployment rate at
3.9% and March job growth exceeding expectations, adding 303,000 positions.
• U.S. inflation showed signs of moderation in January 2024, as CPI rose 3.1% year-over-year, marking a slight decline from December 2023's 3.4% increase.
This trend can be attributed to a combination of factors, including lower energy prices, easing food costs, and base effect comparisons.
• In its February 2024 meeting, the Federal Open Market Committee (FOMC) maintained the target range for the federal funds rate at 4.50% to 4.75%, reflecting
a cautious approach amidst global anticipation of easing rate cuts. While U.S. inflation remains above the Fed's long-term target of 2%, the central bank aims
to strike a balance between controlling inflation and supporting economic growth.
• Throughout 2023, U.S. inflation fluctuated between a peak of 9.1% in June and a low of 2.0% in May. The Federal Reserve's decision to hold rates steady in
February 2024 follows a similar pattern seen in previous months, such as in January 2024 and throughout the second half of 2023. Moving forward, the central
bank will closely monitor economic data and adjust its policies as needed to achieve price stability and promote sustainable economic expansion.
• The U.S. unemployment rate has demonstrated consistent improvement, reaching 3.7% in February 2024. This marks a significant decline from the beginning
of 2023, which saw a rate of 3.8% in January. Notably, the current rate nears the record low of 3.5% achieved in September 2022.

18. Consumer Spending in 2023: A Moderate Growth Trajectory Amidst Evolving
Economic Factors
In 2023, consumer spending demonstrated a moderate growth trajectory, registering an average annual growth rate of 3.2%. Several factors contributed to this
expansion:
• Release of pent-up demand: The easing of pandemic-related restrictions spurred increased spending on goods and services.
• Strong labour market: Low unemployment levels and rising wages boosted consumer confidence and disposable income.
• Government stimulus: Ongoing fiscal support from the government aided spending, particularly in the first half of the year.
Looking at quarterly trends, growth ranged from 3.5% in Q1 2023 to 2.8% in Q3 2023, with a slight rebound in Q4 2023.
In 2024 (as of February), consumer spending is projected to moderate, with forecasts ranging from 2.0% to 2.5% growth. Factors contributing to this moderation
include rising inflation, higher interest rates, and the global economic slowdown, which could potentially erode purchasing power, dampen consumer confidence,
and lead to cautious spending behaviour.

19. Steady Labour Market and Moderate Growth Amidst Global Challenges and FII
Volatility
• The latest economic indicators paint a positive picture of the U.S. labour market,
with the unemployment rate holding steady at 3.7% in January 2024. This marks
the third consecutive month at this level, signifying a notable improvement
compared to December 2023's rate of 3.8%. The U.S. unemployment rate has
averaged 3.9% from 2018 to 2024, with a record low of 3.5% in September 2022
and a peak of 14.7% in April 2020.
• The current low unemployment rate reflects a robust labour market, with
consistent job growth observed in various sectors, including professional and
business services, healthcare, and retail. Additionally, labour force participation
has remained relatively stable, indicating sustained engagement in the job market.
Throughout 2023, FII inflows to the U.S. experienced volatility, with periods of both inflows
and outflows. Several factors influenced these fluctuations:
• Global risk sentiment: Geopolitical tensions, global economic uncertainties, and interest
rate hikes in other countries impacted investor decisions.
• U.S. economic performance: Strong economic growth and relatively stable interest rates
initially attracted FIIs. However, concerns about inflation and potential recessionary
risks led to some outflows later in the year.
Recent data reveals that the U.S. economy expanded at an annualized rate of 2.6% in the
fourth quarter of 2023 (Q4 2023), marking a deceleration from the revised growth rate of
3.2% in Q3 2023. This development underscores the resilience of the U.S. economy, which
continues to face various external challenges and uncertainties.

20. Europe's Economy in 2023-2024: Moderate Recovery Amidst Inflation, Tight Policy,
and Geopolitical Uncertainties
• Europe's economic landscape presents a complex picture of growth constraints, moderating inflation, and delicate policy decisions. Despite expected improvements in domestic
demand and tight labour markets, Europe's growth in 2024 will remain subdued due to lingering inflationary pressures and elevated interest rates. However, the easing of supply-
side constraints and substantial EU-funded investments will provide some support.
• Following a slowdown from 3.4% in 2022 to 0.5% in 2023, GDP growth is projected to recover moderately to 0.8% in 2024, with further stabilization at 1.5% in 2025 and 2026.
Although short-term indicators point to weak economic activity in the fourth quarter of 2023, growth is anticipated to strengthen in early 2024 as real disposable income rises.
• Inflation is expected to continue its downward trajectory, with the average rate dropping below 3% in most major European economies in 2024. This decline can be attributed to
easing supply-side conditions and the effects of monetary policy tightening. However, demand-driven price pressures linked to tight labour markets may keep inflation above
historical averages, posing a risk of renewed acceleration in 2024. Potential spikes in key commodity prices due to supply shortages could exacerbate this risk.
• In light of persistent inflationary pressures, the European Central Bank (ECB) is expected to maintain its record-high interest rates until mid-2024, followed by gradual easing. The
need for a data-dependent approach and the uncertain impact of rate adjustments on inflation mean that the ECB cannot commit to a specific rate path. The effects of high
borrowing costs and tight credit conditions will continue to be felt by households and businesses throughout the year.

21. Europe's Labour Market and Trade in 2023-2024: Robust Employment, Gradual
Unemployment Decline, and Subdued Trade Amidst High Energy Prices
• Despite cooling, the labour market is expected to remain robust. Employment growth will moderate compared to 2023, with slower growth rates and a positive outlook. Labor
productivity growth should strengthen over the forecast period, albeit with levels remaining below long-term trends. Unemployment rates are expected to temporarily increase to
6.6% in 2024, before gradually decreasing to 6.5% in 2025 and 6.4% in 2026.
• Nominal wage growth in Europe is projected to remain robust, supported by tight labour markets. However, it is expected to gradually decline as inflationary pressures and
minimum wage increases moderate. Compensation per employee growth is forecasted to decrease from 5.3% in 2023 to 3.3% in 2026. The labour market's resilience has led to a
revision in the 2024 growth rate, reflecting tighter markets and stronger negotiated wage increases in the near term. This trajectory indicates that purchasing power losses due to
inflation will be recovered by the end of 2024. Unit labour cost growth is expected to peak and decline significantly, partly due to rising productivity, albeit below historical trends.
• Europe's trade outlook remains subdued, as high energy prices and the euro's effective appreciation over the past year have impacted competitiveness. Euro area exports
weakened in the second and third quarters of 2023, with a recovery expected from the fourth quarter. However, export price competitiveness is challenged by the euro's
appreciation and high energy costs for firms. Imports are also becoming less sensitive to demand, contributing to sluggish trade dynamics.

22. Germany and France Face Economic Challenges in 2023-2024: Stagnation, Uneven
Inflation Decline, and Regional Disparities Amidst Persistent Uncertainties
• Germany's GDP contracted by 0.2% year-on-year in the final quarter of 2023, marking a second consecutive decline following a 0.3% contraction in the previous period. The
German economy is anticipated to experience slow growth or stagnation in 2024 due to persistent uncertainties, subdued consumer spending, and restrained business
investments.
• Inflation in Germany has recently declined, with consumer prices rising 2.9% year-on-year in January 2024, driven by cheaper energy purchases. Further decreases in inflation are
anticipated for the current year, though the decline may be uneven. Economists will closely monitor the evolving inflationary dynamics as Europe works to restore stability and
foster sustainable growth.
• France's unemployment rate remained steady at 7.5% in the fourth quarter of 2023, following a slight increase throughout the year from 7.1% in the first quarter. The labour
market in France has shown stability despite ongoing economic challenges, with a constant demand for labour and a rising activity rate, currently at 74.1%.
• Regional disparities persist in France's unemployment rates, with the overseas regions experiencing higher rates than the mainland. The unemployment rate is notably higher in
regions like Mayotte, Réunion, Guadeloupe, Martinique, and Guyana compared to the national average. In contrast, regions like Auvergne-Rhône-Alpes, Centre-Val de Loire, and
Bourgogne-Franche-Comté have unemployment rates lower than the national average.

23. Japan's Economic Landscape in 2023-2024: Balancing Growth and Inflation
Amidst Policy Challenges
• As we delve into Japan's economic landscape in early 2024, a delicate balancing act between supporting growth and managing inflation becomes evident. The Bank of Japan (BOJ)
is maintaining its ultra-low interest rate policy to stimulate the economy and achieve its 2% inflation target. While this approach has effectively supported borrowing and spending,
it has also limited the BOJ's ability to combat inflation compared to other countries raising rates.
• Inflationary pressures are mounting in specific sectors, with the overall Consumer Price Index (CPI) at 2.2% year-over-year in February 2024. Food prices remain a concern (2.6%
YoY), while declining energy prices (-1.0% YoY) provide some relief. Shelter costs, including rent (7.8% YoY) and owned accommodation (6.7% YoY), contribute significantly to
inflation. The BOJ faces the challenge of navigating these inflation concerns while supporting economic growth, given its limited room for raising interest rates.
• Consumer spending presents a mixed picture, with gradual wage growth, government stimulus, and pent-up demand supporting spending. However, rising inflation, high household
debt, wage stagnation, and demographic shifts are potential headwinds. The BOJ's monetary policy decisions and government initiatives to increase wages and household income
will play a pivotal role in shaping Japan's economic future.

24. A Tight Market Amidst Skill Mismatches and Demographic Shifts
As we examine Japan's labour market landscape in early 2024, a dichotomy emerges between current strength and potential long-term challenges. The unemployment rate stands at a
low 2.4% (January 2024), reflecting a tight market with more job openings than job seekers. Several factors contribute to this strength:
• Economic recovery: Japan's gradual economic resurgence has driven labour demand across sectors like services and healthcare.
• Aging population: The country's aging demographic, while a long-term challenge, inadvertently creates a tighter labour market as fewer individuals actively seek employment.
However, underlying challenges must be acknowledged:
• Skill mismatches: Discrepancies between job seekers' skills and specific job requirements can lead to frictional unemployment, emphasizing the need for improved skills training.
• Demographic shifts: The long-term trend of a shrinking workforce, due to the aging population, poses significant risks to future economic growth. Addressing this challenge
requires a multifaceted approach, potentially involving policies to encourage higher birth rates, increased immigration, and extending working lifespans.

25. Japan's Economic Landscape in 2023-2024: Balancing Growth and Inflation Amidst
Policy Challenges
Japan's real GDP growth has maintained a moderate pace in recent quarters, reflecting a complex interplay of factors both supporting and constraining growth. As of Q4 2023, real GDP
growth was estimated at [insert latest growth rate data], showing a slight uptick from the previous quarter, yet still falling short of historical averages. Key factors influencing Japan's
GDP growth include:
Drivers of Growth:
• Private consumption: Despite cautious spending habits due to rising inflation and slow wage growth, household spending remains a key contributor to GDP growth.
• Government spending: While offering some support to the economy, Japan's high public debt places limitations on the government's ability to provide significant economic
stimulus through spending.
Challenges and Uncertainties:
• Global economic slowdown: A downturn in key trading partners could negatively impact Japanese exports and overall economic activity.
• Domestic demand: Stagnant wage growth and rising inflation could hamper consumer and business spending, potentially hindering domestic demand growth.

26. Australia's Economic Landscape in 2023-2024: Navigating Inflation, Interest Rates,
and Employment Fluctuations
• Australia's annual inflation rate declined to 4.1% in Q4 2023, marking the lowest rate since Q4 2021. The decrease in inflation, surpassing expectations, was largely driven by
moderating prices in both goods and services. Notably, essential categories like food, housing, and transportation experienced significant moderation, while prices for clothing and
furnishings showed a decline. However, certain sectors such as alcohol and tobacco, furniture, and communication witnessed price increases. Despite the Reserve Bank of
Australia's (RBA) preferred measure, the Trimmed Mean CPI, softening to 4.2%, it remains above the target range of 2-3%, indicating the need for continued inflation management.
• The RBA decided to maintain the interest rate at 4.35%, with the aim of curbing post-pandemic inflation and bringing it within the target range of 2-3% by 2025. Interest rates have
increased by a total of 425 basis points over the past two years. Although inflation and cost pressures in the country have continued to ease, inflation remains high as services
prices are not falling quickly enough. The RBA will closely monitor global economic trends, domestic demand, and inflation and labour market outlooks to guide future policy
decisions. The board also maintained the interest rate on Exchange Settlement balances at 4.25%.
• Australia's employment rate decreased to 64.20% in December 2023, down from 64.70% in November. The average employment rate since 1978 has been 59.39%, with a record
high of 64.70% in November 2023 and an all-time low of 54.00% in April 1983. The country's unemployment rate climbed to 3.9% in February 2024, despite the creation of over
60,000 jobs in January. The participation rate reached a record high, contributing to the increase in unemployment.
• As Australia's economy navigates inflationary pressures, interest rate policy, and employment fluctuations, ongoing monitoring of these key economic indicators will be crucial for
policymakers and stakeholders in making informed decisions and promoting sustainable growth.

27. Fluctuating Unemployment, Steady GDP Growth, Strong Wage Growth, and Robust
Consumer Spending
• Australia's seasonally adjusted unemployment rate experienced an increase to 4.1% in January 2024, marking the highest level since January 2022. This figure surpassed
forecasts of 4.0% and indicated a rise of 22.3 thousand unemployed individuals, bringing the total to 600.6 thousand. The number of people seeking full-time jobs rose by 24.8
thousand, reaching 404.3 thousand, while part-time job seekers declined by 2.5 thousand to 196.3 thousand.
• Australia's Gross Domestic Product (GDP) expanded by 2.10% in the third quarter of 2023 compared to the same period last year, surpassing market forecasts of a 1.8% growth.
This result is a slight improvement from the previous quarter's revised figure of 2.0% growth. Over the past years, Australia's GDP has fluctuated, with an average growth rate of
3.37% from 1959 until 2023, hitting an all-time high of 7.80% in March 1961 and a record low of -7% in June 2020.
• The Australian wage index recorded its strongest annual growth in over 14 years, with a 4.2% increase in Q4 2023, exceeding both market expectations and the previously revised
Q3 figure. Public sector wages saw the highest increase since Q1 2010 at 4.3%, while private sector wages followed closely at 4.2%. Several industries, including healthcare,
education, and retail, contributed significantly to this overall wage growth. However, the quarterly growth rate slowed down to 0.9%, marking the lowest growth rate in three
quarters.
• Consumer spending in Australia reached an all-time high of AUD 298,714 million in the third quarter of 2023, surpassing the previous quarter's figure of AUD 298,630 million. This
marginal increase in consumer spending indicates a positive trend in the country's economy. From 1959 until 2023, consumer spending in Australia has averaged AUD 138,276.05
million.

28. After surprisingly robust performance in 2023, most G7 economies will slow down in
2024 due to tight monetary policy and fading temporary tailwinds (G7)
• The Group of Seven (G7), comprising Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States, is a formidable intergovernmental economic organization
contributing over 40% of global GDP while representing merely 10% of the world's population.
• The United States economy in 2024 is poised to navigate a range of challenges and opportunities. Economic growth, while maintaining its strength, is slowing due to tighter
monetary policy, as inflation continues to be a primary concern. The labour market remains robust, characterized by low unemployment rates and potential labour shortages in
select sectors. The government's budget deficit is contracting but must address the persistent challenge of high public debt. The current account deficit is expected to widen,
reflecting strong domestic demand and a weaker dollar. Growth is anticipated to be driven by the service sector and technology industries, while manufacturing and energy sectors
must contend with the ongoing repercussions of supply chain disruptions and rising costs.
• France's economic growth is expected to be moderate in 2024, with projections ranging from 0.7% to 1.2%. This restrained growth can be attributed to several factors, including
the impact of the Ukraine conflict on energy security and global supply chains, high inflation affecting consumer purchasing power, and the mixed results of ongoing labour market
reforms.
• Germany's economic outlook for 2024 is overshadowed by the risk of a recession, following a contraction in the final quarter of 2023. Forecasts predict a decline of up to 0.5%,
driven by the war in Ukraine disrupting energy supplies and global trade, high inflation eroding consumer confidence, and persistent structural weaknesses in the German economy.
• The UK economy is forecasted to grow sluggishly in 2024, with projections ranging from 0.8% to 1.3%. This slow growth can be attributed to a combination of factors, including
Brexit-related trade frictions, persistent supply chain disruptions, and high inflation affecting consumer spending power.

29. Inflation in many LatAm economies has dropped below 5%, allowing central banks to ease
monetary policy (Latin America)
• Italy's economic recovery in 2024 is projected to be sluggish, with growth forecasts ranging from 0.5% to 1.0%. This slow growth can be attributed to the lingering effects of the
pandemic, ongoing structural weaknesses in the Italian economy, and potential spillover effects from a eurozone slowdown.
• Japan's economic growth in 2024 is projected to be moderate, with forecasts ranging from 1.2% to 1.8%. This modest growth is attributed to a combination of factors, including a
rebound in domestic demand, ongoing weakness in global trade, and an aging population that dampens economic dynamism.

30. China's Economic Outlook in 2023-2024: Moderating Growth, Market Uncertainty,
Expansionary Policies, and Real Estate Challenges
• After demonstrating resilience in the post-COVID era, China's GDP growth rate is expected to moderate over the next two years. Factors such as the ongoing real estate sector
turmoil, heightened geopolitical tensions, and unfavourable demographic shifts are likely to contribute to this slowdown. Estimates indicate a potential decline in GDP growth to
3.5% by 2028, signalling a gradual deceleration of China's historically robust growth engine.
• Amidst growing economic uncertainty, China has experienced a notable correction in its financial markets. Reduced foreign investment, partly attributable to geopolitical tensions,
has dampened market sentiment and impacted capital market growth. As foreign portfolio investors recalibrate their exposure to China, domestic policymakers must work to
restore investor confidence and attract much-needed capital inflows.
• Recognizing the urgency of bolstering the economy, China's government has implemented several expansionary fiscal policy measures. The issuance of a special 1 billion RMB
bond to support local government expenditures represents a decisive effort to stimulate economic activity. However, this intervention will likely contribute to a widening fiscal
deficit, projected to reach 3.8% of GDP in 2023, surpassing the historical average of 3%.
• Amidst persistent challenges, investment in China's real estate sector has witnessed a significant decline. The financial distress experienced by major developers, such as Country
Garden and Evergrande, has undermined investor confidence, leading to reduced fixed asset investments in the sector. As a percentage of GDP, real estate investment has fallen
from 13.0% to 9.6% and is expected to decline further. Although fixed investment in other sectors remains relatively robust, the overall real estate slowdown underscores the
urgent need for structural reforms to revitalize the struggling industry.

31. China's Real Estate Sector in 2023-2024: Declining Sales, Reduced Investment, and
the Imperative for Reform
• China's housing market has experienced significant headwinds in recent times, as evidenced by declining sales and reduced investment in new projects. According to recent data,
housing sales in China fell by 6.5% in 2023, with a particularly sharp decline of 17.1% in December. This downturn has been accompanied by a slowdown in real estate
development, which contracted by 9.6% last year.
• The recent struggles of prominent real estate developers, such as China Evergrande, have further exacerbated the situation. These challenges underscore the need for structural
reforms and targeted policy interventions to revitalize the ailing housing sector.
• Despite the ongoing difficulties, there are signs of resilience in certain regions. Hong Kong, for example, has demonstrated relative strength amidst the broader market downturn.
However, the overall health of China's housing market remains a concern, as evidenced by the continued slowdown in sales and investment.
• Efforts to address the issues plaguing the housing market must focus on restoring investor confidence and fostering a more favourable business environment. This may include
targeted policy measures to support struggling developers, as well as initiatives to encourage increased investment in the sector.
• As China's housing market contends with persistent challenges, it is essential to strike a balance between promoting growth and ensuring stability. By implementing thoughtful
reforms and policy interventions, policymakers can work towards fostering a more resilient and sustainable housing sector, which will be crucial for the long-term health of China's
economy.

32. India's Inflation Dynamics in 2023-2024: Declining CPI, Fluctuating Food Prices,
and RBI's Growth-Supportive Policy
In India, the annual Consumer Price Index (CPI) inflation has eased to 5.1% in January 2024, down from 5.6% in December 2023. This decrease in inflation can be attributed mainly to
a fall in food inflation from 9.5% to 8.3%, as well as a decline in price increases for goods such as tobacco, intoxicants, and footwear.
In the previous quarters of FY23-24, CPI hit its lowest point in May at 4.25% and its highest in July at 7.44%. After a dip in October, it surged again to a four-month high in December.
These fluctuations were primarily driven by irregularities in monsoon patterns due to El Nino, which led to a surge in food prices.
The Reserve Bank of India (RBI), in its 47th Monetary Policy Committee (MPC) meeting, has set the objective of achieving the medium-term target for CPI at 4%, while accommodating
sufficient scope for supporting growth. The projected and forecasted inflation rates for FY25 are as follows:
Q1: 5%
Q2: 4%
Q3: 4.6%
Q4: 4.7%

33. Declining Unemployment, Increasing Consumer Spending, and Policy Imperatives
• The unemployment rate in India decreased to 6.78% in January, down from 8.65% in December 2023. Since 2018, the unemployment rate in India has averaged 8.18%, reaching
an all-time high of 23.50% in April 2020 and a record low of 6.40% in September 2022.
• There was a sharp spike in unemployment observed in October. This state of unemployment is mainly attributed to factors such as stagnation in employment, global economic
recession, and the contraction of labour markets. However, as the situation has been improving, unemployment rates have reached lower levels.
• Addressing unemployment will require a combination of government policies focusing on job creation, skill development, and encouraging investment in labour-intensive sectors.
By tackling unemployment and maintaining stable interest rates, India can work towards fostering a more robust and inclusive economic recovery.
• Consumer spending in India witnessed an increase, reaching 23700.94 INR Billion in the third quarter of 2023, up from 23126.01 INR Billion in the second quarter of 2023.
Consumer spending has shown a steady upward trend, with an average of 13608.25 INR Billion from 2004 until 2023. It hit an all-time high of 24787.00 INR Billion in the fourth
quarter of 2022, marking a record low of 4469.88 INR Billion in the third quarter of 2004.

34. Positive Growth Signals Amidst Steady Employment Rates
• According to recent data, the HSBC India Manufacturing PMI edged up to 56.7 in February 2024, a marginal increase from 56.5 in the previous month. This marks the strongest
growth in the factory sector since September 2023.
• Similarly, the HSBC India Composite PMI increased to 61.5 in February 2024, up from a final 61.2 in the prior month. This represents the highest figure since July 2023.
• The net FII inflow for February FY24 was recorded at 1509 crores outflow, indicating a moderate exit of foreign capital from the Indian market during this period.
• Unemployment Rate: India's unemployment rate stood at 7.33% in 2022. Although this figure reflects a challenging scenario, the country has been working towards creating job
opportunities and improving the overall employment landscape.
• Employment Rate: In 2021, India recorded an employment rate of 51.1%, which remained stagnant from the last year. The period between 2010 and 2021 saw varying levels of
employment rates, with a general positive trend.

35. Strong Growth Across Key Sectors
India's economic momentum continued in the fourth quarter (Q4) of 2023, with GDP surging by 8.4%, exceeding expectations and marking its strongest performance since Q2 of 2022.
Several sectors demonstrated notable growth, including:
Service industries: 6.7% (vs. 4.5% in the previous quarter)
Finance and real estate: 7% (vs. 6.2%)
Manufacturing: 11.6% (vs. 14.4%)
Construction: 9.5% (vs. 13.5%)
Utilities: 9% (vs. 10.5%)

36. Most Southeast Asian economies ended 2023 with lower GDP growth, but domestic
demand is expected to gradually firm and exports slowly rebound through 2024 (ASEAN)
• Southeast Asia's economic outlook for 2024 is positive, fuelled by robust domestic demand in several large economies and steady foreign direct investment. Multinationals' supply
chain diversification towards regional industrialized nations further supports growth. In 2024, a steady rebound in domestic demand is expected, driven by low unemployment and
an improving private consumption cycle. Lower inflation will bolster consumer purchasing power.
• The tourism sector, crucial for many Southeast Asian economies, is projected to continue its recovery as international tourism approaches pre-pandemic levels. The region is
forecasted to remain one of the world's fastest-growing, becoming an increasingly significant driver of Asia-Pacific growth. The combined nominal GDP of ASEAN nations reached
USD 3.6 trillion in 2022, more than doubling from USD 1.6 trillion in 2009, surpassing India's USD 3.5 trillion.
• Inflation rates have decreased across the region, influenced by improved supply-side conditions and lower food and energy prices. Disinflationary forces are anticipated to persist
in 2024, though El Niño and potential geopolitical disruptions pose risks to energy prices and supply chains. Central banks are expected to ease policy gradually in response to
controlled inflation and sub-trend growth.

37. Disinflationary forces are likely to remain in place through 2024, notwithstanding El Niño
and geopolitical risks, allowing central banks to gradually ease policy (ASEAN)
• Indonesia’s GDP growth rate rebounded to 5.04% in Q3 2023, recovering from a two-year low. Growth was primarily driven by reduced inflation and increased government
spending preceding the 2024 presidential elections. Despite slowed exports and household consumption, the economy maintains a steady growth trajectory.
• Malaysia’s economy expanded by 3.3% in Q3 2023, exceeding expectations due to a boost in private consumption and investment. The services, construction, and agricultural
sectors contributed to this growth. Domestic demand remains the primary growth driver, bolstered by Bank Negara Malaysia's maintenance of a 3% overnight policy rate, ensuring
stable funding costs.
• Economic growth in Philippines remained robust at 5.6% in Q4 2023, following a rebound to 5.9% in Q3 from 4.3% in the previous quarter. The recovery was driven by increased
public spending, which grew by 6.7% after contracting by 7.1% in the previous quarter. Investment declined by 1.6%, attributed to reduced inventories. Construction expanded by
12.4%, spurred by public and household projects.
• Singapore's economy exhibited strong growth in recent quarters, with Q4 at 1.2% and Q3 at 1%, surpassing Ministry of Trade and Industry estimates. Key growth drivers included
financial services and tourism-supported accommodation and retail trade. International tourism has rebounded during 2023, contributing to the retail trade sector's expansion and
increased private consumption. Despite low unemployment at 0.8% in Q4 2023, wage stagnation may impact discretionary spending.
• Vietnam's GDP grew by 6.72% year-over-year in Q4 2023, accelerating from an upwardly revised 5.47% rise in Q3, marking the ninth consecutive period of expansion.

38. The Expanded BRICS Bloc in 2024: Increased Economic Power and Influence Amidst
Internal Challenges (BRICS)
• The BRICS economies (Brazil, Russia, India, China, and South Africa) are set to experience a major shift in 2024 with the inclusion of Egypt, Ethiopia, Iran, Saudi Arabia, and the
UAE. This expansion is expected to increase the BRICS GDP by an estimated $2.6 trillion, bringing the projected total to $28.5 trillion in 2024. As a result, the BRICS bloc will play
an increasingly significant role in the global economy.
• With the addition of Saudi Arabia, Iran, and UAE, BRICS now controls over 43% of global oil production, effectively doubling its capacity. This increased control over energy
resources, combined with the group's 25% share of global exports, demonstrates BRICS' growing economic power and influence, particularly in the Middle East.
• The original BRICS members (Brazil, Russia, India, China) hold a commanding 72.5% of global rare earth mineral reserves, which are critical for high-tech products. China is the
dominant player in this sector, accounting for 85% of refined rare earths globally. With a projected 59% of global middle-class growth in 2024 coming from China, India, Brazil, and
Egypt, BRICS is positioned to become a significant consumer base for rare earth minerals.
• Despite its growing prominence, the BRICS bloc faces internal challenges due to economic and political differences among its member states. China remains the driving force
behind the group, contributing 62.9% of its total GDP. Issues like the China-India rivalry and concerns over human rights records in some member countries could create friction
within the bloc. Moreover, China's economic slowdown, demographic challenges, and potential property market crisis may impact the overall stability of BRICS.

39. Meet the Team

40. Meet the contributors to the global outlook
Swastik Nandy
Vice President
swastiknandy.scholaride@gmail.com
Siddharth Banerjee
Vice President
siddharthbanerjee.scholaride@gmail.com
Yugansh Arora
Vice President
yugansharora.scholaride@gmail.com
For more information contact us at: communications@scholarideconsulting.com

41. Meet the contributors to the global outlook
For more information contact us at: communications@scholarideconsulting.com
Manan Thareja
Analyst
mananthareja.scholaride@gmail.com
Mayank Agarwal
Analyst
mayankagarwal.scholaride@gmail.com
Bhargab Deka
Analyst
bhargabdeka.scholaride@gmail.com
Soham Kothari
Analyst
sohamkothari.scholaride@gmail.com