According to the latest economic data, the divergences in growth between the US, Europe and Japan are expected to remain at the beginning of 2024.
In Europe, the economic situation in Q1 was once again disrupted by exceptional factors, this time linked to the Red Sea crisis, which particularly affected automotive production in January and, by extension, industrial production. Signs of an improvement in the business climate observed in previous months have nevertheless been somewhat confirmed, reinforcing our scenario of acceleration in growth in the eurozone from Q2 (0.3% q/q after 0.1% q/q in Q1). The upturn in the UK is expected to be more modest, with activity continuing to be hampered by inflation.
In the United States, the economy's strong momentum observed in H2 2023 should slow down, but growth is nevertheless expected to remain solid in Q1, with a GDPNow from the Atlanta Fed (0.6% q/q) close to our own forecast (0.7%).
In Japan, despite more favourable business climate indicators, growth is expected to be negative (-0.2% q/q) due to demand remaining low.
Communication from central bankers changed in March, especially in Japan where, as we had anticipated, the Bank of Japan decided to end its negative interest rate policy. Our scenario of a first monetary easing in June in Europe and in the US was also strengthened.
Inflation data however, are not giving central banks carte blanche to change their policy. This is due to the resilience of core inflation, linked to rising prices in the services sector and a labour market that remains under pressure. This is particularly the case for the UK, but also for the US or the eurozone.
