安联：2025-2026全球经济展望：逆势而行

040812

19December2024Globaleconomicoutlook:FourInflationshouldfinallyretreatDevelopedmarketsto

yearsinarowofbelow3%to2%allowingmonetaryslowdownledbytheUS

economicgrowtheasingtocontinueeconomy

141017

Emergingmarkets:ResilientCorporatesarenavigatingCapitalmarketoutlook:

despiteheadwindsfromauncertaintyandcontinuetoInvestingwithoptimism

containedtradewarrebalanceinventoriesandvigilance

AllianzResearch

GlobalEconomicOutlook2025-26

Defyinggravity?

Ouroutlookplaylist,inspiredby

Wicked,themusical.

Happyholidays!

AllianzResearch

2

Executive

Summary

LudovicSubran

ChiefEconomist

ludovic.subran@

JordiBascoCarrera

LeadInvestmentStrategist

jordi.basco_carrera

@

AnaBoata

HeadofEconomicResearchana.boata@

MaximeDarmet

SeniorEconomistforUK,US&France

maxime.darmet@

LluisDalmau

EconomistforAfrica&

MiddleEast

lluis.dalmau@

GuillaumeDejean

SeniorSectorAdvisor

guillaumedejean@

BjörnGriesbach

SeniorInvestmentStrategist&EurozoneEconomist

bjoern.griesbach@

JasminGröschl

SeniorEconomistforEuropejasmin.groeschl@

FrançoiseHuang

SeniorEconomistforAsiaPacific

francoise.huang@

AnoKuhanathan

HeadofCorporateResearch

ano.kuhanathan@

MariaLatorre

SectorAdvisorB2B

maria.latorre@

MaximeLemerle

LeadAdvisorInsolvencyResearchmaxime.lemerle@

YaoLu

InvestmentStrategist

yao.lu@

MaddalenaMartini

SeniorEconomistforItaly,Spain,Greece&Benelux

maddalen.martini@

LucaMoneta

SeniorEconomistforEmergingMarketsluca.moneta@

SivagaminathanSivasubramanian

DataAnalyst

Sivagaminathan.Sivasubramanian@

Thewickedwitchofthewestis(almost)dead!We’retalkingaboutinflation,ofcourse.Butwill2025betheyearwecanfinallystoppayingattentiontothemenandwomenbehindthecurtain?Afterasuperelectoralyear,2025willbeallabouteffectivepolicymaking.Asmarketsreachedanewhighthisyear,

onequestionisoneveryone’smind:willriskyassetscontinuetobe“popular”(you’regonnabepopular)?Inkeepingwithourtradition,wecouldn’tresisttakingsomemusicalinspirationforourlasteconomicoutlookoftheyear.WehopeyoufinditWicked!

•Globaleconomicgrowth:Notquite“dancingthroughlife”.GlobalrealGDPgrowthisexpectedtoremainmoderatebutsteadyat+2.8%in2025-

26.Weexpectdevelopedeconomiestoexperienceaslightslowdown,withgrowthtaperingfrom+1.8%in2025to+1.7%in2026.Incontrast,emergingeconomiesarelikelytosustainrobustgrowthat+4.1%acrossbothyears.TheUSeconomyisforecastedtogrowat+2.3%in2025,slowingto+1.8%in2026.TheEurozoneisprojectedtogrowby+1.2%in2025and+1.5%in2026,withcountrieslikeSpainandIrelandleadingwithhighergrowthrates.Germany,however,issettorecordmodestgrowthaftertwoyearsofrecession.China’sgrowthisprojectedtomoderatefrom+4.6%in2025to+4.2%in2026asthecountrycontinuestotransitiontowardsamoreconsumption-driveneconomywhilemanagingexternaltradepressures.

•Is“somethingbad”ontheway?Afterthesuperelectoralyear,“the

Wizards(andnotus)”ofpolicydesignwillbeveryinfluentialforboththeeconomyandcapitalmarkets.Politicalchanges,suchastheUSelections,

couldreshapeeconomiclandscapesandintroduceuncertainties.Geopoliticalrisks,includingtensionsbetweenmajorpowers,continuetobeasignificant

concernforglobalstability.ApotentialtradewarbyQ22025,withUStariffsrisingto60%forChinaand10%forothers,couldincreaseUSinflationand

weakenglobalgrowth.SignificantUSimmigrationcutsmightstrainlabor

marketsinkeysectorsandaddtoinflationarypressures.ChallengestotheFederalReserve’sindependence,includingpossiblecurrencyinterventions,coulddramaticallyincreasefinancialrisks.Fiscalpolicychanges,suchas

majorspendingcutsorextensivetaxcuts,couldimpactmarketconfidence.IntheMiddleEast,atougherUSstanceonIrancouldslowgrowthandraiseoilprices.Similarly,reducedUSsupportforTaiwanmightleadtotariffsandnegativelyimpactsemiconductorequities.Theclimateandenergytransitionfaceschallenges,withthepotentialrepealoftheInflationReductionAct,

whichcouldmaintainneutralgrowthandreduceinflationwhileboostingfossilequities.

19December2024

3

•“Noonemournsthewicked”:Inflationshouldfinallyretreatto2%in

2025,allowingformonetarypolicyeasingtocontinueuntilend-2025.

“Thankgoodness”centralbankpolicywillshiftfromtaminginflationtosupportinggrowth(butdonotholdyourbreath).UpsiderisksremainfrompotentialtariffimplementationintheUSandunfoldingretaliationmeasures.Furthersupply-chainconstraints,fromtheriseinprotectionistmeasuresandongoingconflictstriggeringhighertransportationcosts,couldtemporarily

increaseinflation.TheFed,theBoEandtheECBareexpectedtolowerratesto3.5%,3.25%and2%byend-2026,respectively.Emergingmarketsarealsolikelytoseecautiousmonetaryeasing,exceptforcountrieslikeBrazil,whichmayfaceratehikesduetoeconomicoverheating.

•“Nogooddeed”goesunpunished:Governmentbondyieldsareexpectedtoremainbroadlystableoverthenexttwoyears,withmarketsalreadypricinginsignificantcentralbankeasing.TheeffectsoflargeUSfiscal

deficitsandacceleratedquantitativetighteninginEuropewilloffsetthe

downwardpressurefromfallingpolicyrates.Frenchbondspreadsare

likelytoremainwiderthanthoseofSpain,reflectingcomparativelyweakerfundamentalsforFrance,whileswapspreadsinEuropeshouldremainclosetozero.

•Buttheoutlookisnotentirely“wonderful”forriskyassets.Recovering

earningsandstrongfundamentalsshouldsupportriskyassets,withequitiesprojectedtodeliveranaveragetotalreturnof8-10%andcreditspreads

likelytoremainsteadythrough2025and2026.However,highvaluations,economicuncertaintyandconcentrationriskscouldcapgainsandleaveriskyassetsexposedtounexpectedpoliticaloreconomicshocks..

•“Whatisthisfeeling?”:Uncertaintycontinuesforcompanies.While

policyshiftsandgeopoliticalriskspresentchallenges,sectorslikeAIandtechnologyareexpectedtoseegrowth.Investmentininfrastructureandsustainablesectorsisalsoprojectedtoincrease.Businessinsolvenciesareexpectedtoincreaseby+2%in2025andtostabilizeathighlevelsin2026.

AllianzResearch

4

Globaleconomicoutlook:

Fouryearsinarowofbelow3%economicgrowth

Weexpectglobalgrowthtoremainsteadybutnot

stellarat+2.8%in2025-26.Weexpectdeveloped

economiestoexperienceaslightslowdown,withgrowthtaperingfrom+1.8%in2025to+1.7%in2026.TheUS

economyisforecastedtogrowat+2.3%in2025,slowingto+1.8%in2026.Thisreflectsagradualdecelerationas

thecountrywillnavigatevariouseconomicchallenges,

includingpotentialfiscalpolicyshiftsandtradedynamics.TheUKisexpectedtoseegrowthof+1.3%in2025,slightlyincreasingto+1.5%in2026.TheEurozoneisprojectedto

growby+1.2%in2025and+1.5%in2026,withcountrieslikeSpainandIrelandleadingwithhighergrowthrates.Germany,however,issettorecordmodestgrowthaftertwoyearsofrecession.

Emergingeconomiesarelikelytosustainrobust

growthat+4.1%acrossbothyears.China’sgrowthisprojectedtomoderatefrom+4.6%in2025to+4.2%in2026asthecountrycontinuestotransitiontowardsamoreconsumption-driveneconomywhilemanagingexternaltradepressures.Indiaisexpectedtomaintain

Table1:GlobalrealGDPgrowth,%

Growth(yearly%)

Global

2022

3.3

2023

2.8

2024f

2.8

2025f

2.8

2026f

2.8

USA

LatinAmerica

Brazil

UK

Eurozone

GermanyFrance

ItalySpain

CentralandEasternEurope

Poland

RussiaTürkiye

Asia-Pacific

China

JapanIndia

MiddleEast

SaudiArabia

Africa

SouthAfrica

2.5

3.9

3.1

4.8

3.6

1.52.64.86.2

1.1

5.9

-1.3

5.5

3.2

3.01.16.5

6.1

7.7

3.9

1.9

2.9

1.9

2.9

0.3

0.5

-0.1

1.10.82.7

1.2

0.1

3.75.1

4.3

5.31.77.8

1.3

-0.8

3.1

0.7

2.8

2.0

3.1

0.8

0.8

-0.1

1.10.53.0

2.1

2.6

2.82.7

4.2

4.9

-0.3

6.6

2.1

1.4

2.8

1.1

2.3

2.6

2.5

1.3

1.2

0.40.70.81.8

3.0

3.4

1.82.5

4.1

4.61.26.4

3.0

4.3

3.4

1.7

1.8

3.2

2.3

1.5

1.5

0.91.21.02.0

3.2

3.4

2.03.5

3.9

4.21.16.5

3.2

4.1

4.0

1.6

Sources:Nationalsources,AllianzResearch

19December2024

5

stronggrowthat+6.4%inboth2025and2026,driven

bydomesticconsumptionandinvestment.TheBrazilianeconomyisforecastedtogrowat+2.5%in2025,slowingslightlyto+2.3%in2026asitnavigatesinflationary

challenges.Russia’sgrowthisanticipatedtobemodest,

with+1.8%in2025and+2.0%in2026,reflecting

geopoliticalandeconomicadjustmentstotheoverheatingoftheeconomy,pushingthecentralbanktotakea

hawkishstance.CentralandEasternEuropeisprojected

toacceleratefrom+3.0%in2025to+3.2%in2026,with

PolandandRomanialeadingthegrowth.InLatinAmerica,growthisforecastedtorisefrom+2.6%in2025to+3.2%in2026,withcountrieslikeArgentinaandColombiashowing

notableimprovements.TheAfricancontinentisexpectedtoseegrowthacceleratefrom+3.4%in2025to+4.0%in

2026,withcountrieslikeNigeriaandKenyacontributing

significantly.IntheMiddleEast,growthisprojectedto

increasefrom+3.0%in2025to+3.2%in2026,supportedbyrecoveryincountrieslikeSaudiArabia.Finally,inAsia,weexpectstronggrowth,withslightmoderationfrom+4.2%in2025to+4.0%in2026,drivenbymajoreconomieslike

IndiaandVietnam,exposedtofiscalconsolidationandtoaslowergrowthinglobaltrade,evenifAseancountrieswillcontinuetoremainmoreattractivethanChinainthecontextoftheUS-Chinatradewar.

Table2:Potentialsurprisestoourscenario

FactorMarketThemeDescriptionProbabilityMacroimpactMarketimpact

Trade

Fullblowntradewar

RisingtariffswillraiseinflationintheUSanddepressglobaleconomicconfidenceandgrowth

45%

Growth--

Inflation++

DMinterestrates:-

DMequities:-

Immigration

UScutsimmigrationdrastically

Strongdropinnetimmigrationorevenmassivedeportation(above1mnpeopleperyear)

20%

Growth--

Inflationneutral

USinterestrates:-

USequities:-

Monetarypolicy

Fedindependenceseriouslychallenged

Fed'smandatetweakedtoallowforlowerinterestratesanditsindependencereduced

35%

Growth-

Inflation++

USinterestrates:+

USequities:-

USDcurrencyintervention

FedintervenesontheFXmarkettoweakentheUSD

20%

Growth-

Inflation+

EZinterestrates:-

USFiscalpolicy

Fiscalspendingcuts

DOGEdrasticallycutsspending(morethanUSD300bnperyear),includingfederalagenciesandsocialspending

30%

Growth-Inflation-

USinterestrates:-

USequities:-

Taxcuts

Alltaxcutspromisedaredelivered(>2.5%ofGDPintotal)

45%

Growth+Inflation+

USinterestrates:+

USequities:+

Geopolitics

Ukraine-Russiaendofwar

Ukraine-Russiaceasefire,peacetalks,USliftssanctionsonRussia,butEuropekeepsthem

45%

Growth+

Inflationneutral

EZindustrials:+

EuropeunderpressureonNATO

USthreatenstodefundNATO,pressuringEuropetoincreasedefensespendingtoabove2%ofGDPperyear

40%

Growth+Inflation+

EZdefensestocks:+

MiddleEast:TougherstanceandsanctionsonIran

USescalatespressureonIran,includingthreatsofUSmilitaryintervention

30%

Growth–Inflation+

Oilprice:+

China-Taiwan:USreducessupporttoTaiwan

USthreatenstoimposetariffsonTaiwaneseimportsandtowithdrawsupportagainstChinaifTaiwandoesnotincreasemilitaryspending

30%

Growth–Inflation+

Semiconductorequities:-

Climatetransition

Climate&energytransition

RepealingoftheIRA,defundingofenvironmentalagencies

55%

GrowthneutralInflation–

Fossilequities:+

Oilprice:-

EZFiscalpolicy

Germanyliftsthedebtbrakecompletely

Atwo-thirdmajorityinthenewlyelectedGermanparliamentchangestheconstitutiontoremovethedebtbrake

20%

Growth+Inflation+

DEinterestrates:+

EZequities:+

Sources:Nationalsources,AllianzResearch

Figure1:QuarterlyrealGDPgrowthrates,q/q,%

3.0

2.5

2.0

1.5

1.0

0.5

0.0

-0.5

-1.0

US

EurozoneUK

ChinaJapan

*DottedlinesareAZResearchforecasts

202220232024202520262027

Sources:National,AllianzResearch

AllianzResearch

6

Riskstoourscenarioremaintiltedonthedownside.A

full-blowntradewarassoonasQ22025(45%probability)withUStariffsrisingto60%forChinaand10%fortherestoftheworldshouldpushupUSinflationandundermine

globalconfidenceandgrowth.DrasticUSimmigration

cuts(morethan1mnpeopleperyear)couldstrainthe

labormarket(20%probability),notablyinsectorssuchasconstruction,farming,foodpreparation,healthcareand

transportation,andexacerbatetheinflationarypressures.ChallengestotheFederalReserve‘sindependence,with

a35%chanceofitsmandatebeingalteredtosupport

lowerinterestrates,includingpotentialUSDcurrency

interventionstolowerthevalueoftheUSD,couldpushtheUSeconomyintoafinancialcrisis.Fiscalpolicyshifts,suchassubstantialspendingcuts(morethanUSD300bnper

year)–30%probability–orbroadtaxcuts(morethan2%ofGDPintotal)–45%probability–couldaltermarketcon-fidence.IntheMiddleEast,weseea30%probabilityoftheUStakingatougherstanceonIran,escalatingsanctions

andmilitarythreats,whichcouldslowgrowthandincreaseoilprices.Similarly,a30%chanceexistsoftheUSreducingsupporttoTaiwan,potentiallyimposingtariffsandaffec-tingsemiconductorequitiesnegatively.Theclimateand

energytransitionmayfacechallenges,witha55%proba-bilityofrepealingtheInflationReductionAct(IRA)and

defundingenvironmentalagencies.Thisscenariocould

maintainneutralgrowth,reduceinflation,andboostfossilequitieswhileloweringoilprices.

Intimesofglobaluncertainty,thepathtopeacecanbeaschallengingastheconflictitself.Since2022,internati-onalmarketshaveexperienceddisruptionsduetochan-

gesinsupplychains,particularlylinkedtothesanctionsonRussia,notablyonenergy.RecentdevelopmentsindicatethatthenewlyelectedUSadministrationmaycontinuetosupportUkraine,albeitwithafocusonstabilizingecono-micconditions.TheevolvingsituationinSyriaandRus-

sia‘srelianceonassistancefromothernationshighlight

thepotentialfordiplomaticnegotiations.Thisscenario

underscorestheimportanceofmaintainingstronginter-

nationalrelationshipsandeconomicresilience.Global

markets,includingthoseintheCaucasusandCentralAsia,needtonavigatethesecomplexitiescarefully.Russiamayseektostrengthenitseconomictiesandregainmarket

share,whichcouldinfluenceglobalcompetitiondynamics,especiallybetweentheUSandChina.TheUScouldfurtherpushEuropetoincreaseitsmilitaryspendingaspartoftheNATOcommitments.TheEuropeanCommissionPresidenthassuggestedtheEUcouldincreaseitsaverageannual

militaryspendingto1.9%ofGDPfromthecurrent1.3%ofGDP,whichcouldmeananadditionalUSD275bnspending,i.e.doublewhattheUSspendsannually.

Inthisinterconnectedworld,businessesandnations

alikemustremainadaptable,ensuringthattheyare

preparedforshiftsinthegeopoliticallandscapeand

theirpotentialimpactonglobaleconomicstability.All

eyesareonfiscalmovesfollowingthesuperelectoralyear.InEurope,manyeconomiesanticipatemoderategrowthin2025,bolsteredbylowerinterestrates,aresilientlabormarketandNGEUinflows.Butthefiscaladjustmentsre-

quiredtocomplywiththereinstatedandrevisedEUfiscalrules,asoutlinedinthefirsteditionoftheMedium-term

StructuralPlans,canfaceadditionalchallengesifgrowthishamperedbyfurthertraderestrictions.Thestarting

fiscalpositionsvarysignificantlyamongcountries.Someeconomies,liketheNetherlandsandGreece,arecautious-lylooseningtheirfiscalstance,whileothers,suchasItaly,aremakingminimaleffortstoreturntofiscaldiscipline.

Meanwhile,countrieslikeFranceandBelgium,whichfacenationalpoliticalchallenges,faceamorecomplicated

pathaheadtomeetfiscaltargets.AcrosstheAtlantic,theincomingUSTreasurySecretaryhaspledgedtoreduce

thegovernmentdeficitto3%,agoalthatwillbehardto

achieve,giventhepledgetocuttaxes.Wewouldexpectrelativelylimitedspendingcutsconcentratedonfederalagenciesandtheremovalofsomeprocurementcontracts.Givenlargefiscalimbalancesandthestatedgoaltore-

ducethedeficit,wedonotexpectallofthetaxcutpromi-sesfromthecampaigntrailtobedelivered¹.

WiththereturnofPresidentTrumpandatradewarloo-ming,wenowexpectslowertradegrowthin2025-2026.

Afterarecessioninvaluetermsin2023,globaltradewill

seeamoderatereboundin2024,likelygrowingby+3.6%involumeterms(roughlymatchingtheaveragepaceover2011-2019,Figure3),helpedbycompaniesrestockingandhouseholdsrenewingpurchasesofdurablegoodswhilere-ducingspendingonservices.TheendoftheyearwillalsolikelybesupportedbycompaniesrushingtoshipgoodsinanticipationofthehighertariffslikelytobeimposedbythenextUSadministration,andotherpotentialdisruptionsinthecomingquarters.Thisfrontloadingwilllikelyremain

atailwindforglobaltradeinthefirsthalfof2025,beforetheeffectsofarenewedbutcontainedtradewar²arefeltfromthesecondhalfof2025andinfullin2026.Asaresult,wenowexpectglobaltradeinvolumetogrowby+2.8%in2025(-0.2ppfromourpreviousforecast)and+2.3%in2026

1Inall,weexpectaroundUSD100bnofspendingcutsperyear,USD160bnoftaxcutsdeliveredin2026(vs.USD285bnpledged),andtherenewalofthe2017TCJA.

2Inourbaselinescenario,acontainedtradewarconsistsofUSmeasurestargetedatChina(withtariffsincreasingto25%ongoodswithoutcriticaldependencies)andmodesttariffhikesontherestoftheworld(to5%),excludingCanadaandMexico.

19December2024

7

(-0.5ppfromourpreviousforecast).Intermsofexport

pricesinUSDterms,thedeflationaryenvironmentobser-vedsince2023willlikelycontinueinto2025asexporterspartlytakeontheimpactofhighertariffstomaintaintheirmarketshares.Asaresult,inUSDvalueterms,thedown-siderevisionstoourforecastsareevenlarger,withgrowthreaching+2.3%in2025(-1.7pp)and+4.1%in2026(-0.8pp).

Figure2:Fiscalpolicy–governmentprimaryfiscalbalance%ofGDP

4

2

0

-2

-4

-6

-8

-10

-12

USUK

GermanyFrance

Italy

2014201520162017201820192020202120222023202420252026

Sources:LSEGDatastream,AllianzResearch

Figure3:Globaltradeofgoodsandservices,annualgrowth

25%

20%

15%

10%

5%

0%

-5%

-10%

-15%

Forecast

23.4%

Volume

13.3%

10.6%

9.4%

2.3%

1.6%

5.7%

-2.2%

-1.3%

-10.5%

Value

Price

4.1%

2.3%

2.8%

2.3%

3.6%

4.0%

11.2%

3.3%

1.7%

2.9%

5.6%

0.6%

4.1%

2.9%

2.1%

-0.7%

-7.6%

-9.2%

20132014201520162017201820192020202120222023202420252026

Sources:LSEGRefinitiv,AllianzResearch

AllianzResearch

8

Inflationshouldfinallyretreatto2%allowingmonetaryeasingtocontinue

ThetrajectoryofinflationisexpectedtodifferbetweentheUSandotherdevelopedmarketsin2025.IntheUS,

underlyingmeasuresofinflationhaveremainedstickyoverthepastsixmonthsorso.Forinstance,coreCPIinflation

trimmedmeaninflationhassteadiedataround+3.2%y/y.WeexpectUSinflationtocontinuetoovershoottheFed’s2%targetoverthenext18monthsorsoasthepolicies

likelytobeimplementedbytheTrumpadministration

willpushupprices.Inaneconomywithlittle,ifany,

sparecapacity,thecombinationoftariffhikes,verytightimmigrationpolicy,loosefinancialconditionsandtaxcuts(comingin2026)shouldmaintaininflationarypressures.WeexpecttheUS‘’reflation’’policieswillstarttolose

tractiontowardsthesecondhalfof2026asprolonged

tightmonetarypolicywouldpusheconomicgrowthbelowpotential.Ontheotherhand,indevelopedEuropean

countries,weexpectinflationtohoveratoraroundthe

centralbanks’targetsduring2025asthecombinationofprolongedweakdemandandthefadingofpastsupply

shockstakesanincreasingtollonunderlingwageand

pricegrowth.Servicesinflationwillremainselevated,butthiswouldmostlyreflectacatchupwithpastwageand

costpressures;weexpectservicesinflationtomoderate

through2025,butremainabovethepre-Covidaverage.Inall,weexpectinflationtoaverage+1.9%in2025intheEurozonevs+2.8%intheUS.IntheUK,weexpectinflationtoremainabitabovetheBankofEngland(BoE)’starget(at+2.3%),supportedbystrongerpublicinvestmentandstillelevated,albeiteasing,wagepressures.

19December2024

9

Figure4:Quarterlyinflationrates,y/y%

10

8

6

4

2

0

-2

US

Eurozone

UK

ChinaJapan

Rate

2%

*DottedlinesareAZResearchforecasts

1920212223242526

Sources:LSEGDatastream,AllianzResearch

Globallabormarketsappeartobestillingoodshape–atleastatfirstglance.IntheEurozone,unemploymentreachedhistoriclows,stabilizingaround6.3%inOctober2024,whileemploymentcontinuedtogrow,risingto

4.7%aboveend-2019levels,andacrosscountriesand

agegroups.Thisresilienceispartlyduetothefurlough

schemeimplementedduringthepandemiccrisisandthenbecauseofcompanieshoardinglaborinanticipationofafavorableeconomicenvironmentandasubsequent

increaseindemand,aswellasbenefitingfromhigher

profitsbolsteredbyinflation.However,thissituationhasalsoledtoadeclineinproductivity.Now,thereareearly

Figure5:Beveridgecurvesbycountry,%

signsofcoolinginthebloc’slabormarkets.Vacancyrateshavebeguntodeclinefromtherecordhighsachieved

duringthepost-pandemicjob-richrecovery,although

theyremainaboveend-2019levels.Simultaneously,hiringintentionsaresoftening,andlaborisnowviewedlessasalimitingfactortoproduction,afterbeingreportedasamajorconstraintformonths.Weexpectunemploymenttoriseslightlyto6.5%inEuropein2025asthenormalizationofcorporateprofits,coupledwithsustainedwagegrowth,promptsfirmstoreconsidertheircostefficiency.

12

10

Jobvacancyrate

8

6

4

2

0

GermanySpain

2024-Q2

FranceItaly

US

2019-Q2

2024-Q2

2024-Q2

2019-Q2

o2019-Q2

2024-Q2

2019-Q2

2019-Q2

2024-Q2ooo

24681012141618

Unemploymentrate

Sources:LSEGDatastream,AllianzResearch

AllianzResearch

10

Conversely,intheUS,theunemploymentratehasrisen

steadilysinceApril2023.Moreover,surveyssuggestthatitwillcontinuetoriseinthecomingmonths.However,

thepick-upoftheunemploymentrateisprimarilydrivenbystronglaborforcegrowthratherthanweakeningjobgrowth.MeasuresoflabormarkettightnessaswellasalowprivatelayoffratealsoindicatethattheFedshould

notbeconcernedbyanincreasingunemploymentrate.

Rather,persistentinflationandwagepressuressuggest

thatthenaturalrateofunemployment(i.e.theratethatbringswagegrowthandinflationtotheirsteadystate)

maybeabithigherthantheFed’sestimateof4.2%.Inthiscontext,wethinktheFedwilleventuallyhavetoacceptahigherunemploymentratetotameinflation.

StickyUSinflationwillprompttheFedtobecome

increasinglyhawkish.Stallingprogressondisinflation

andthestrengthoftheeconomyhavealreadymade

someFOMCcooltheirheelsoneasingpolicy,withChairPowelstatingthattheFOMC‘’canaffordtobealittle

morecautious’’onmovingpolicytowardaneutralsetting.WhileweexpecttheUSeconomytoslowdownthrough2025,westillexpectittoexpandatacomfortableclip

of+2.3%onaverage.Meanwhile,weexpectinflationto

remainabovetheFed’starget.Wedoseeafurthereasingofthelabormarketincomingmonths,butwithonlya

moderateincreaseintheunemploymentrate.Indeed,

slowinglaborsupply,inducedbytightimmigrationpolicy,shouldputflooronunemployment.Inthiscontext,weseelittlescopeforfurthereasingofmonetarypolicyinthe

next18months.WeexpecttheFedtopauseinJanuary

2025,todelivera25bpsratecutinMarchandtostop

fromtherewithstill-tightmonetarysettingsasinflation

remainsstubbornlyaboveitstargetandtheeconomy

keepsgrowingatahealthyclip.Accordingly,theFedfundsratewouldsettleat4.25%(upperbound)overthenext

18monthsorso.WeseetheFednormalizingpolicyinthesecondhalfof2026bycuttinginterestratesdowntoourestimateoftheneutralrate(3.5%)amidlowergrowthandcoolinginflation.

Table3:Inflationforecasts,yearly,%

Inflation(yearly%)

Global

2022

8.2

2023

6.1

2024f

5.6

2025f

3.9

2026f

3.2

USA

LatinAmerica

Brazil

UK

Eurozone

GermanyFrance

ItalySpain

CentralandEasternEurope

Poland

RussiaTürkiye

Asia-Pacific

China

JapanIndia

MiddleEast

SaudiArabia

Africa

SouthAfrica

8.0

14.0

9.3

9.1

8.4

6.95.28.28.4

9.1

14.4

13.872.3

4.0

2.02.56.7

13.9

2.5

14.2

6.9

4.1

14.4

4.6

7.3

5.4

5