Global Economic Research19 January 2024J P M O R G A Nwww.jpmorganmarkets.comContentsShipping disruptions reignite supply chain woes12Germany: Assessing fiscal policy in 202417Brazil is still positioned to grow20BoE will need more persuasion to cut in 1H2423Scandinavia: Gauging FX pass-through to inflation26China: Commodity and public housing to diverge30Indonesia: liquidity eases as external conditions turn33 Global Economic Outlook Summary4Global Central Bank Watch6Nowcast of global growth7Selected recent research from J.P. Morgan Economics9J.P. Morgan Market Watch10 Data Watches United States36 Focus: So what went on with holidayshopping last year?43Euro area44Japan48Canada52Mexico54Brazil56Argentina58Andeans60United Kingdom62Emerging Europe66South Africa69Australia and New Zealand70China, Hong Kong, and Taiwan71Korea74ASEAN76India80 Regional Data Calendars82Economic and Policy ResearchBruce Kasman(1-212) 834-5515bruce.c.kasman@jpmorgan.comJoseph Lupton(1-212) 834-5735joseph.p.lupton@jpmorgan.comMichael S Hanson(1-212) 622-8603michael.s.hanson@jpmchase.comJPMorgan Chase Bank NAGlobal Data Watch•Expansion resilience reinforces caution on disinflation progress•Easing cycles for Fed, ECB, BoE all to start around mid-year•China�s growth hits target but imbalances remain key concern•Next week: DM flash Jan PMIs (US down, EMU up), US 4Q GDP (2%)Shades of greyIt is often said that economic forecasts lend credibility to weather predictions. To be sure, both disciplines deal with complex systems in which unprecedented recent developments (COVID and climate change) have increased uncertainty. While we continue to emphasize limited visibility in key elements of the 2024 outlook—most notably whether we are moving on to a path of a sustainable expansion—it is notable that markets and economic forecasters are increasingly embracing a soft-landing scenario. On growth, we see low 1H24 recession risks. With financial conditions having eased materially and moderating inflation boosting household purchasing power, pressures that could spark a near-term break have abated. The year-end signal from the global composite PMI and labor markets aligns with our forecast that growth is proceeding at a trend-like pace as we turn into the new year. Sustaining growth at this pace will likely require a narrowing in last year�s wide sectoral and regional gaps. The latest signals around convergence are not encouraging. A 1.3%ar rise 2H23 global factory output was more muted than expected and the recovery continues to stand on a fragile base as output gains are heavily concentrated in Asia tech activity (Figure 1). DM final goods demand was weak in 2H23, held back by Western Europe, which led to a pickup in inventory accumulation. The message from survey data is weak, with the December global manufacturing PMI sliding back into contractionary territory and this week�s US January regional Fed surveys nosedivin...
