Crédit Agricole Forecasts Global Economic Slowdown Amid Delicate Balances

Crédit Agricole has released its macroeconomic scenario for the global economy in 2024-2025, projecting a period of delicate balances and slowing growth. The report highlights significant short-term risks stemming from geopolitical tensions, including the conflict in the Middle East and the war in Ukraine, which are creating uncertainty, particularly for oil markets.

In the United States, growth is expected to moderate from an estimated 2.5% in 2024 to 1.3% in 2025. While household finances have been supported by gains in equities and property, cracks are appearing. A key concern is the cooling labor market, which could deteriorate rapidly, and the strain on lower-income households facing rising delinquencies on credit cards and auto loans. Inflation, though easing, risks stagnating above the 2% target.

China faces downside risks that authorities will need to actively manage. Details on the specific scenario for China were not extensively elaborated in the provided context, but its economic trajectory remains a crucial factor for global growth.

The scenario suggests a downturn towards the end of 2024, but bank analysts deem a recession unlikely, though not impossible. The overall forecast anticipates a marked slowdown compared to previous years, necessitating close monitoring of economic indicators across major economies.