This Week in The Lens

The Lens is FrontierView’s weekly newsletter published by our Global Economics and Scenarios team. Each week, The Lens features easily digestible content that dives into the business implications of macroeconomics on the market today.

Economic and geopolitical trends and insights from FrontierView’s Global Economics and Research team
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This week, the world’s eyes were turned towards China, which held its annual “Two Sessions” conference. Certain announcements caught the attention of our analysts: the growth (5%) and inflation (3%) targets were particularly ambitious, given the country’s dimming growth prospects, downward price pressures, and lack of substantial fiscal stimulus.

In a way, however, the “Two Sessions” proved relatively unsurprising: the conference was a display of further consolidation of Xi’s power, continuing China’s trend toward one-man rule that has been several years in the making.

There is a new reality in China: while the country will continue to offer growth opportunities moving forward, these will be less bountiful than in previous years and, crucially, they will exist in a more competitive, volatile and uncertain environment. Multinationals should make sure they are updating their assumptions around China.

Analyst, Global Economics

If you think you’re having a good week, chances are Donald Trump is having a better one.

The former president cleared two major hurdles this week in his bid to return to the White House in November 2024. First, the US Supreme Court threw out a case accusing him of engaging in insurrection in the 2020 election, which would have barred him from running in the upcoming contest. Trump also trounced his Republican opponents on “Super Tuesday”, winning 14 out of the 15 primaries held on the day, effectively halting his main rival Nikki Haley’ s momentum.

Still, it is unlikely to be smooth sailing in the run-up to the election, notably because costly legal bills continue to eat into his campaign funds. But with Joe Biden’s popularity continuing to hover near record lows, our base case remains that Donald Trump will narrowly beat Biden to the presidency. MNCs should start preparing for that outcome now.

Analyst, Global Economics

When the monetary tightening cycle started in early 2022, one of the main concerns was around housing: after a rapid increase in home prices during the pandemic in several major markets, the fear was that a surge in interest rates would cause a sharp correction. While house prices did fall, this proved to be milder than expected, and the trend appears to be reversing.

The worries lie elsewhere, notably the commercial real estate sector: a perfect storm of high interest rates, indebtedness, and high vacancy rates from shifting work patterns is plunging the sector into a crisis.

Executives should pay attention to the health of the global commercial real estate sector. While its troubles have so far remained contained, a more acute deterioration of the sector could lead to financial stress, putting the relative resilience of the global economy at risk.

Analyst, Global Economics

Let’s talk about rate cuts.

The story of the last two years across the globe has been one of aggressive monetary tightening by most of the world’s central banks. But with inflation now seemingly at a turning point, thanks to easing supply chain issues, lower commodity prices, and slowing nominal wage growth, the question now becomes: when will central banks start to cut, and by how much?

On that front, MNCs can be optimistic, but cautiously so. Major central banks, including the Fed and the ECB, are likely to begin lowering interest rates around mid-2024. But they, and others, are likely to be extremely cautious in doing so, out of concerns that inflation might resurface. Crucially, rates are likely to settle above pre-pandemic levels.

There is light at the end of the tunnel in the battle against inflation. However, structurally high rates are likely to stay in the foreseeable future, marking a stark end to the pre-COVID era of cheap finance.

Analyst, Global Economics

This week, the world got a taste of what a second Trump presidency could look like: at a campaign rally, the former president stated that he would “encourage” Russian attacks on NATO countries who didn’t comply with the 2% spending rule. 

Trump’s explosive comments triggered a slew of pushback and condemnations from the US’s allies. But behind the scenes, those same leaders will also have found themselves scratching their heads: is he serious? Is he just campaigning? Is this a negotiating tactic?

Finding the answer to these questions is just one of the many complexities that a Trump return to the White House would bring. Our latest  2024 US Elections Report , published last week, takes a close look at what a second Trump presidency would look like, and how MNC’s can prepare.

Analyst, Global Economics

Read our insights from this week:

Brazil's new fiscal framework
Amid a resilient yet decelerating consumer landscape, multinationals should continue targeting wealthier consumers less prone to ongoing price sensitivity. Multinationals should also consider minimizing price increases to protect market share among lower- and middle-income consumers. Finally, while the credit landscape will improve, the high level of […]
The rial has depreciated significantly in recent weeks Iran held elections in early March, which saw conservatives secure the bulk of seats for both parliament and the Assembly of Experts- tasked with supervising the supreme leader’s performance and appointing his successor. This insight bite assesses Iran’s […]
The territory’s sluggish post-pandemic recovery has made its government reluctant to reduce fiscal expenditure B2C companies should not revise their sales projections based solely on this budget, despite the upward revision of our GDP growth forecast for 2024. This is because the budget’s reduction in various […]

The Author

Antoine Bradley

Analyst, Global Economics

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