Business Banking Outlook 2024 – North America Economy in Focus
(22 December 2023 - United States) US and Canadian banks are well positioned to weather a more adverse operating environment and their demonstrated ability to adapt to a more changing environment illustrates this resilience.
Mastercard reports that 2024 will be a year of trade-offs for North America.
US consumers and corporations alike will make choices about how to spend and invest as the business cycle ages and growth slows. Mastercard Economics Institute is forecasting real GDP growth of 1.7 percent in 2024, which is a moderation from the expected 2.4 percent pace in 2023. Job creation is likely to slow but remain healthy, while inflationary pressures ease. This should lead the Federal Reserve to start cutting rates in the late Spring and slowly “normalise” policy.
While large debt burdens and high interest rates pose downside risks to the Canadian economy, the counterbalance comes from positive immigration trends and onshoring. After a retrenchment in the middle of 2023, the economy should return to subdued GDP growth in 2024 while inflation slows, and the Bank of Canada begins rate cuts. The key risk is high debt burdens, which are exacerbated by variable mortgage rates.
“As we approach 2024, we expect both inflation data and economic demand to soften, as the tailwinds for growth and risk markets are fading. Overall, we are cautious on the performance of risky assets and the broader macro outlook over the next 12 months, due to building monetary headwinds, geopolitical risks and expensive asset valuations" commented JPMorgan Chief Global Markets Strategist and Global Co-Head of Research, Marko Kolanovic.
Utilising East & Partners’ ongoing global primary voice of the customer intelligence and analytics, the 2023/24 Outlook offers a clear and evidence-based indication of what may lie ahead. Helping equip banking and finance leaders with a greater understanding of what lies behind today’s complex markets, enabling them to develop more robust strategies focused on the ultimate goal of sustainable growth.
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