Navigating the shifting sands of global economics, Amundi has released its 2024 Global Investment Outlook, guiding investors through a year expected to be marked by slower growth and increased volatility.
As the world's largest economies decelerate and a mild recession looms in the United States, the forecast projects a year of strategic opportunities amidst challenging market conditions.
Vincent Mortier, Group CIO of Amundi, highlighted the investment strategy for the coming year, stating, "Investing in 2024 will be all about quality sovereign & corporate bonds, and seeking growth through Asian equities, as this region should benefit from better economic prospects than the others." Mortier also stressed the importance of focusing on long-term themes like energy transition and supply chain relocations.
With an anticipated global GDP growth of 2.5% in 2024, markedly driven by a slowing pace in Developed Markets (DM), investors are advised to keep a close eye on Emerging Markets (EM), which are expected to be more resilient with a forecast growth of 3.6%. However, this resilience in EM is not without its own set of challenges, presenting a higher level of fragmentation.
Monica Defend, Head of Amundi Investment Institute, noted how shifting dynamics in growth, inflation and monetary policy will create ripe opportunities throughout the year, saying, "Turning tides in growth, inflation, and monetary policy will generate opportunities for investors to add on risk assets during the year."
Central to Amundi's projections is the expectation of a dovish turn in monetary policy later in the year, with the Federal Reserve anticipated to cut rates towards the end of the first half. Fiscal policy, on the other hand, is expected to be less supportive in DMs due to high debt levels, with a focus leaning towards targeted energy transition policies.
Investment strategies for 2024 should evolve with the economic tide; initially focusing on sovereign debt, quality credit, and hard currency EM debt. As the year progresses and the Federal Reserve adjusts its stance, opportunities in risk assets and Asian equities could prove favourable, tapping into the potential growth advantages this region holds over others.
The landscape of investment in 2024 is set to challenge traditional approaches, urging investors to remain agile in the face of a slower and fragmented growth environment. Amundi's insights come at a crucial time, as strategies formulated today will likely define the success of portfolios in a year that promises to keep the global investment community on its toes.
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