{"id":90338,"date":"2024-03-22T00:00:00","date_gmt":"2024-03-22T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/a-soft-landing-for-global-economy-is-in-sight-mashreq\/"},"modified":"2024-03-22T00:00:00","modified_gmt":"2024-03-22T00:00:00","slug":"a-soft-landing-for-global-economy-is-in-sight-mashreq","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2024\/03\/22\/a-soft-landing-for-global-economy-is-in-sight-mashreq\/","title":{"rendered":"A soft landing for global economy is in sight -Mashreq"},"content":{"rendered":"

Global central banks will begin loosening monetary policy in 2024 as inflation <\/strong>decelerates<\/strong>, our friends at Mashreq said in their latest 2024 Economic and Markets Outlook<\/a> report. The cooling inflation figures will encourage central banks to \u201cpause\u201d before beginning to cut interest rates in 1H 2024, as they look to ensure that progress on disinflation is on track. Premature cuts could lead to renewed inflationary pressures, Mashreq notes the European Central Bank<\/a> said last month.<\/p>\n

\u201cSoft landing\u201d on the horizon: <\/strong>With the global economy posting resilient growth last year, Mashreq expects the upward trajectory to be carried over into this year, driven mainly by private consumption activity. Central banks are projected to halt their policy tightening as global headline inflation is projected to cool to 5.8% in 2024 and 4.4% in 2025, Mashreq\u2019s report reads, citing figures from the IMF.<\/p>\n

Mashreq suggests that a US recession is unlikely to happen in 2024<\/strong>, as the country continues to register strong economic growth and higher wage growth. The US Federal Reserve is expected to keep implementing disinflationary measures as it eyes \u201cstronger growth,\u201d Mashreq writes, citing Fed Chairman Jerome Powell. <\/p>\n

Why does this matter? <\/strong>The UAE\u2019s overnight deposit rate, or the base rate on overnight deposit facilities, is anchored to the US Fed\u2019s interest rates as the AED is pegged to the USD.<\/p>\n

ICYMI-<\/strong> The Central Bank of the UAE followed in the Fed\u2019s footsteps to keep interest rates steady this month<\/a>, maintaining its overnight deposit rate at 5.40% and the overnight lending rate at 5.90%.<\/p>\n

With 2024 already fraught with risks, the lender expects the global economy to slow down. <\/strong>From the ongoing Russia-Ukraine war continuing to impact energy and food prices to the Chinese economy stumbling and \u201c[dragging] down global growth,\u201d Mashreq foresees global economic and geopolitical developments threatening to reverse the disinflationary trend, forcing central banks to delay interest rate cuts, impacting capital flows and trade volumes, and disrupting global supply chains.<\/p>\n

The bond market is in for a good year: <\/strong>The global bond market is expected to grow in 2024, propelled by cooling global inflation, receding market volatility and central banks easing their restrictive monetary policies. <\/p>\n

Appetite for emerging market (EM) bonds is expected to grow on the back of \u201clower default risk,\u201d<\/strong> with bilateral and multilateral lenders poised to support distressed issuers. EM central banks are expected to ease their interest rates driven by easing domestic financial pressures in tandem with the decelerating inflation.<\/p>\n","protected":false},"excerpt":{"rendered":"

Central banks are in no rush to cut interest rates<\/p>\n","protected":false},"author":1,"featured_media":90339,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1556],"tags":[19,7,791,331,288],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-90338","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-economy","tag-enterpriseam-uae","tag-global-economy","tag-interest-rates","tag-mashreq","wpautop","entry"],"acf":{"mongo_id":"9dc2a8aa-1da2-4794-8369-fd3cd0f64ddb","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/3\/2021.jpg","photo_position":"above","homepage_title":"","full_issue_title":"A soft landing for global economy is in sight -Mashreq","related_issue":[90325],"teaser":"Central banks are in no rush to cut interest rates","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/3\/.3bdf20ae-6b00-48bb-8bac-403a4a900cee.mp3"},"yoast_head":"\nA soft landing for global economy is in sight -Mashreq - 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