Mon Sep 30 17:36:30 UTC 2024: ## BNP Paribas Predicts Soft Landing for Global Economy Despite Risks
**Paris, France -** BNP Paribas’ Markets 360 division forecasts a soft landing for the global economy in the final quarter of 2024, despite rising risks. The firm believes central banks will be able to navigate a delicate path of easing monetary policy while maintaining decent growth and robust labor markets.
“Central banks seem to have the uncommon luxury of easing policy with a view to still-decent, albeit unspectacular, growth and labour markets robust enough to weather the odd bump in the road”, says Luigi Speranza, Head of Markets 360 and Chief Economist.
The Markets 360 team expects global GDP growth to remain at or slightly below trend, with inflation gradually falling towards central bank targets. However, the team acknowledges that risks to growth have shifted more decisively to the downside in recent months. The US labor market, for example, might be deteriorating faster than expected.
While inflation is expected to decline, the risks are more two-sided, and in the absence of a US recession, it could prove more persistent than anticipated. Fiscal policy and debt sustainability in various countries also pose significant potential volatility.
Japan remains an outlier, with the Bank of Japan expected to continue its gradual tightening course.
As the US Federal Reserve initiates its easing cycle, Markets 360 believes investor focus will shift to the November US election. The outcome of the presidential and congressional races could significantly impact US fiscal policy, debt sustainability perceptions, and import tariffs. Changes in trade and fiscal policy could lead to renewed price pressures.
Overall, while BNP Paribas predicts a soft landing, the path to achieving it is fraught with uncertainties. The firm emphasizes the importance of careful monitoring of economic indicators, especially in the US, and the potential implications of the upcoming election.
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