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Tuesday, February 20, 2024

Economic forecasts 2024 – USA, Europe, Poland. XTB analysis

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The United States economy is doing well at the moment, but in Europe it is very close to recession, although its intensity will be determined by global factors – said Michał Stajniak, deputy director of the XTB analysis department, in a comment. He added that in the case of Poland, the economy should continue to develop.

There is a chance that the global economy will avoid a recession, and some economic indicators suggest that the economic crisis has already passed – according to XTB’s forecasts. Economic activity indicators in the US indicate that the slowdown is over, and consumer demand there is stable – real sales have basically remained unchanged for two years, yet still remain above the long-term trend.

In Europe the situation is much worse

– While the USA is definitely a positive surprise, Europe is clearly disappointing. Economic activity indicators such as PMI show that the situation in Europe is by far the most difficult among all key economic regions. We observed a particularly deep decline in the production sector – said Michał Stajniak, deputy director of the XTB analysis department, in a comment for PAP.

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He added that the main reasons for this decline in production are the extremely high accumulation of inventories after the COVID-19 pandemic energy prices and the ambitious climate policy of the European Union, as well as ongoing globalization.

– Almost everywhere in the world, most industrial companies seem to have coped with excess inventories, although in the case of Europe this burden, along with other factors, appears to be too great. There were hopes that consumers would drive the economy through the services sector, but it seems that quite the opposite is happening – said an XTB analyst.

– We must also remember that the current ECB deposit rate is 4 percent, while it has been negative for the last few years, and previously close to zero for over a decade. As a result, it is difficult to see positive prospects for consumer demand in 2024. To sum up, US economy It’s holding up well at the moment, but Europe is very close to recession, although its intensity will be determined by global factors, he added.

Poland with a “clear image”

In Poland, however – as indicated in XTB’s forecasts – “a quite clear picture of an accelerating economy is emerging.” Inflation it no longer fully absorbs income growth, and the labor market remains strong, laying the foundations for stronger consumption growth. However, this may have negative consequences for inflation.

– Growing consumption and continuing wage growth may make it difficult to fight inflation in Poland in 2024 – said Michał Stajniak. XTB forecasts show that inflation can be expected to drop by around 4-5%. in early spring, but then it may increase slightly and if consumption accelerates, a further decline may be difficult.

– Wages are currently growing at a double-digit rate. The base effect will reduce the rate of wage growth, but there is a chance that it will remain above the level of inflation. Although at the same time, the number of unemployed people is slightly rebounding, which may lead to a reduction in the wage rate – said the XTB analyst.

In his opinion, a risk factor for the Polish economy is Poland’s excessive debt in the absence of a stronger economic recovery, which could lead to a worse perception of Polish assets abroad. However, according to the economist, we should rather expect a good economic situation.

Support for the zloty

– Good domestic economic situation is supportive PLN quotations, which is already relatively strong at this point. In 2024, difficulties in reducing inflation by the Monetary Policy Council may lead to a more restrictive monetary policy. This should support the zloty, said Michał Stajniak.

He added that an additional factor helping the zloty is the hawkish attitude of the Monetary Policy Council, although he emphasized that the zloty exchange rate will depend primarily on the global sentiment.

– The dollar rate will probably return above PLN 4, but we should not prepare for levels higher than PLN 4.25-4.4 – added the XTB analyst.

Main photo source: udmurd/Shutterstock

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