The report highlights a transition towards policy normalisation among major central banks, including the Federal Reserve (Fed), European Central Bank (ECB), and Bank of Japan (BoJ), contingent on continued inflation decline. The Fed is expected to cut the federal funds rate by a cumulative 100 basis points in 2024, with further reductions in 2025, while the ECB may start policy normalisation in the second quarter.

Amid subsiding macroeconomic risks, geopolitical tensions remain a concern, potentially impacting commodity markets and global trade. The ongoing Russia-Ukraine conflict and tensions in the Middle East and Asia contribute to uncertainty affecting regional and global growth, as per the report.

Despite these challenges, the global economy is showing signs of stabilisation, supported by strong performances in large economies and recovery in emerging markets like India, Indonesia, Brazil, and Mexico. These countries are well-placed to benefit from global manufacturing and supply chain reorganisations. China's recovery is uneven, but support measures could stabilise its economy. Europe is expected to see gradual economic stabilisation, particularly as the ECB begins policy normalisation.

Moody's revised upwards the 2024 US growth forecast to 2.1 per cent from 1.0 per cent, reflecting the economy's resilience. India's growth estimate for 2024 has also been raised to 6.8 per cent from 6.1 per cent, making it the fastest-growing G-20 economy. However, growth estimates for Germany, the UK, and Saudi Arabia have been adjusted based on recent data.

The outlook suggests a steady normalisation in economic activity, with most G-20 emerging markets expected to grow close to potential in 2024 and 2025. The US economy's strong performance has been a key driver of global growth, while Europe's economies have managed to avoid deep recessions despite various shocks.