Baseline Macroeconomic Scenarios for Rated Sovereigns June 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 forecasts of various external contributors.

Key Highlights
-- Consensus forecasts for nearly all major economies have improved slightly since our March update.
-- The baseline points to a soft landing in the US and China, and a gradual acceleration in growth in Europe and Japan. Inflation is receding while labor markets are holding strong.
-- We see continued risks of further geopolitical, election, or policy surprises, but these seem unlikely to derail the benign outlook.

"Barring additional shocks, price pressures are likely to ease, giving room for central banks to cut (or continue to cut) rates," notes Thomas Torgerson, Co-Head of Global Sovereign Ratings for Morningstar DBRS.