Baseline Macroeconomic Scenarios for Rated Sovereigns March 2024 Update

This commentary provides an update to Morningstar DBRS' Baseline Macroeconomic Scenarios. These baseline scenarios provide our estimate of the current market consensus, and are drawn from the median forecast of various external contributors.

Key Highlights
-- Global growth remains weak for 2024. Growth forecasts for this year are largely unchanged, aside from the U.S. which improved significantly since December. Unemployment remains low across the major economies.
-- Headline inflation is slowing in several of the major economies. In the event that economic growth weakens further, most central banks have room to ease.
-- Among most major economies, stronger growth is expected in 2025 but subject to downside risks due to geopolitical tensions, electoral uncertainty and vulnerabilities in commercial real estate markets.

“Expectations for U.S. growth have improved markedly since our December Update,” notes Thomas Torgerson, Co-Head of Global Sovereign Ratings for Morningstar DBRS. “However, with few exceptions, most of the world economy continues to struggle with weak growth.”