Executive Summary

Following the US elections, economic uncertainty has heightened, raising numerous questions about the future of trade. At the same time, China has announced additional stimulus measures, and central banks continue to normalize monetary policy as inflation eases.

Economies continue to face a range of geopolitical, climatic, and inflation-led challenges, with some also feeling the effects of structural issues. Against this backdrop, China, India, and the US are outperforming other surveyed economies.

Among developed economies, US GDP continues to eclipse output on the other side of the pond. Real GDP in the US increased at an annual rate of 2.8% in the third quarter of 2024, according to the “second” estimate. In the second quarter, real GDP rose 3.0%. This third-quarter increase primarily reflects rises in consumer spending, exports, federal government spending, and business investment, according to Bureau of Economic Analysis. By comparison growth in Europe was subdued. In the Eurozone, Q3 GDP growth was 0.2% quarter on quarter, and 1.0% year on year. Real GDP growth is expected to be 0.8% in 2024 and 1.3% in 2025, according to European Commission November projections. After prolonged stagnation, the EU economy began growing in the first quarter of this year, and growth continued at a steady but subdued pace through the second and third quarters, with inflationary pressures easing. In the UK, quarterly real GDP is estimated to have grown by 0.1% quarter on quarter in Q3 2024 (after growing by 0.5% in the second quarter) and grew 1% year on year in the third quarter.

Commentators have been busy assessing the impact of President Trump’s return to the White House on the global economy. However, given the broad-brush nature of his campaign utterances and lack of policy detail at this stage, it’s too early to assess how things will play out. Tariffs have been a major talking point with analysts discussing the likely effects on China, Europe, and the domestic US economy. Analyses indicate that there would be some negative impact for the US, with a large rise in tariffs feeding inflation at home, with an accompanying reduction in growth for all affected countries. If Trump does impose 60% tariffs on Chinese goods, as outlined during his campaign for the White House, China’s economy (with manufacturing accounting for almost 40% of GDP) could be significantly impacted.

From a European perspective, former Italian prime minister and ECB president Mario Draghi’s report The future of European competitiveness (published September 9) has examined differences in competitiveness between the EU and other global economies. It identifies three main areas for action to reignite sustainable growth. Its principal conclusion is that “Europe must profoundly refocus its collective efforts on closing the innovation gap with the US and China, especially in advanced technologies.” It states that innovative companies that want to scale up in Europe are hindered at every stage by inconsistent and restrictive regulations. The report also calls for a joint plan for decarbonization and competitiveness.

The third area for action relates to increasing security and reducing dependencies, with Europe notably exposed especially in relation to the supply of critical raw materials, microchips, and defense.

Unsurprisingly, GDP in the emerging economies is somewhat higher than among developed economies but there has been a slowdown. China saw industrial output growth stable in October, registering a 5.3% increase (5.4% in September). Following introduction of a succession of stimulus measures over recent months, early November saw China’s Ministry of Finance unveil a five-year debt-relief package totaling RMB 10 trillion. This is aimed at swapping existing hidden government debt. Estimates indicate the swap will save local governments approximately RMB 600 billion in interest payments over this period.

India’s output has been expanding at a similar pace, with the economy growing 5.4% year on year in Q3. However, this represents a deceleration compared to the 7–8% growth seen in recent quarters. Nevertheless, the Reserve Bank of India remains optimistic, projecting GDP growth of 7.2% for the fiscal year ending March 2025. Russia’s wartime economy is now slowing with growth forecasts for next year strongly dependent on levels of government support.

Meanwhile, in seeking to strike a balance between the risks of inflation and interest rates holding back their economies, the Fed and Bank of England continued cutting rates this month—in contrast to Brazil, which raised rates to combat rising inflation. At its November 7 meeting, which considered the balance of risks in relation to long-term inflation and employment objectives, the Fed’s Federal Open Market Committee (FOMC) opted to lower the target range for the federal funds rate by 0.25 percentage points to 4.50–4.75 %. A day earlier the Bank of England’s Monetary Policy Committee (MPC) voted to cut its policy rate to 4.75%. By contrast, Brazil’s central bank raised the country’s benchmark Selic interest rate by half a percentage point to 11.25% in November. This was in response to a second monthly rise in inflation, with October’s reading of 4.76% breaching the Banco Central do Brasil’s target upper limit of 4.50%. With Brazil seemingly ahead of the economic cycle compared to other surveyed economies, this raises the question of whether its inflationary upturn is a signal that other central banks could find themselves in a similar situation over the coming months. Meanwhile, Russia’s wartime economy continues to be a special case. A strong underlying inflationary trend persists such that the Central Bank of Russia (CBR) raised its key rate to 21% in October, bringing cumulative tightening since June to 500 basis points. The bank also reiterated a hawkish message, warning that it will raise rates again if inflationary pressures fail to abate, potentially in December.

Consumers and producers continue to feel the pressure of high prices, even as inflation eases; final prices have increased by an average of 20–25% since 2019. And consumers remain cautious as new risks emerge. While consumption has been accelerating, in some countries this is still largely driven by prices, with real consumption still subdued. In the US, October’s consumer confidence index (Conference Board) increased to 108.7, up from September’s 99.2. Retail and food services sales for October (adjusted for seasonal variation and holiday and trading-day differences) were $718.9 billion—a 0.4% increase from September. In Brazil, consumer confidence remains below the neutral 100 mark and ticked down to 93.0 in October (93.7 in September), decreasing for the first time in five months. Business confidence rose to 98.1 in October (97.4 in September), continuing its upward trend. On a brighter note, consumer confidence in Mexico was stable in September at 105.5, remaining above the neutral 100-point mark and at the highest level among OECD countries.

Inflation remains under control, albeit that it is slightly elevated in most countries. Expectations around inflation have risen but the outlook remains in the band 2.0–2.3%. In September, food prices were largely unchanged globally, at some 22% above pre-pandemic levels but they are becoming the main driver of inflation in emerging economies.

Among the advanced economies, US consumers’ one-year-ahead inflation expectations at the one-year horizon dipped slightly to 2.9% in October (3.0% in September) and, at the five-year horizon, declined to 2.8% from 2.9%, according to the September Survey of Consumer Expectations. Producer prices are accelerating in the US, while the consumer price index (CPI) rose 2.6% for the 12 months ending October, after rising 2.4% over the 12 months ending September. Core inflation rose slightly to 3.3% (annualized) in October. Headline inflation in the Eurozone was at par with the 2% target, mainly due to declining energy prices (–4.5%) in October, while core inflation stood at 2.7%. Services inflation was 4.0%, which still points to strong domestic price pressures. The UK CPI rose to 2.3% in October, with higher electricity and gas prices partially offset by lower prices for recreation and culture. UK CPI inflation is expected to rise to around 2.75% by the second half of 2024, as last year’s declines in energy prices fall out of the equation, according to the Bank of England’s November Monetary Policy Report.

Among the emerging economies, China continues to battle deflation. CPI inflation has remained low, with the index registering a modest 0.3% in October, a slight dip from September’s 0.4%. However, producer prices posted a decline of −2.9% in October versus September’s −2.8%. India’s retail inflation surged to a 14-month high of 6.21% in October, up from 5.5% in September. This rise was largely driven by food inflation, which reached 9.7% year-on-year in October. In Brazil, inflation climbed to 4.76% in October (4.42% in September), increasing for the second consecutive time and breaching the Central Bank’s target upper limit (4.50%).

Commodity prices have generally remained stable, while the rush for gold continues amid heightened uncertainty. Holdings of the yellow metal are traditionally seen as a convenient way for central banks to diversify their assets. Gold prices have surged by nearly 15% over the past three to four months, with the price per ounce up around 40% on the year. However, prices for industrial metals have also risen slightly, extending their upward trajectory. Energy prices, in contrast, have been stable in November and continue to move sideways.

Both the manufacturing and services sectors maintained the status quo from the previous month, but risks within the manufacturing sector are rising due to lower consumer demand. Companies are reporting a fourth consecutive month of declining new order intake. The services sector remained broadly stable, with stronger growth observed in China, India, and Russia.

In the US, the industrial production index declined slightly to 102.3 in October (102.6 in September). October’s purchasing managers’ index (PMI) for manufacturing was revised higher to 48.5 from a preliminary of 47.8, following a 15-month low of 47.3 in September.

The seasonally adjusted S&P Global UK Manufacturing PMI posted 49.9 in October, down from 51.5 in September. This is the first time that the PMI has fallen below the neutral 50.0 mark since April. A lack of market optimism, slower economic growth, stretched supply chains, and concerns about the impact of the UK Budget announcement drove the slowdown.

Manufacturing in emerging economies was more buoyant. In October, India’s manufacturing sector maintained its expansionary momentum, with the manufacturing PMI reaching 57.5. This strong performance was driven by robust demand for goods and steady production growth. Brazil’s manufacturing PMI fell slightly to 52.9 in October (53.2 in September), remaining above the neutral 50 mark for a tenth month running and indicating modest expansion. Despite falling, the latest reading was consistent with a solid pace of growth. However, Mexico continues to experience challenging business conditions. Driven by a prolonged decline in new business inflows, firms reduced production volumes, laid off workers, and trimmed their input purchases. October’s manufacturing PMI rose from 47.3 in September to 48.4.

Services in developed economies continue to be strong. In the US, the services PMI decreased slightly to 55 (55.2 in September) but remained in the expansion zone. UK service sector output also continued to expand in October, supported by another solid upturn in new work, but the rate of expansion eased for a second month running. At 52.0 in October, down from 52.4 in September, the headline UK Services PMI pointed to the slowest increase in output levels since November 2023—although it has remained in positive territory during each month since.

Similarly, the services sector expanded in India, with the services PMI increasing to 58.5, indicating healthy growth across multiple industries. October saw Brazil’s services PMI climb to 56.2 (from 55.8 in September). The latest rate of expansion was the second highest in 28 months (behind July), driven by positive demand trends and new business gains.

Unemployment rates have remained stable across most surveyed economies. In the US, the unemployment rate remained unchanged at 4.1% in October (3.5% in January 2020). Total nonfarm payroll employment was also essentially unchanged (up 12,000). In the UK, unemployment was estimated at 4.3%. China saw the overall surveyed urban unemployment rate drop slightly to 5.0% in October, down from 5.1% in September. The youth unemployment rate decreased to 17.1% in October, slightly down from 17.6% in September. In Brazil, the three-month moving average unemployment rate fell to 6.4% in September (6.6% in August), down for the sixth time this year, and lower than the same period last year (7.7%). Mexico saw total unemployment drop by 0.02 percentage points in September, reaching 2.74%. During the same period, formal employment grew by approximately 91,000 workers, with the largest increases reported in the agriculture and social services sectors.

On the markets, equity indexes delivered a mixed performance in November. However, US stock markets shone with both the S&P 500 and the Dow Jones posting their biggest monthly gains of the year to date. Meanwhile, government bond yields in most economies have appeared to slow slightly over recent months.

Trade deficits widened in some economies. Overall, world trade volume fell 0.9% in September, with growth across all trade flows in emerging economies and exports in advanced economies. September saw the US trade deficit widen to $84.4 billion, its highest since April 2022. In contrast, Eurozone trade bounced back to a €12.5 billion surplus, from €4.6 billion in August.
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Notable climate volatility over past months is increasing the intensity of focus on the challenge of carbon reduction, amid concerns about food security, drought, storm damage, habitat destruction, and disease. This has urgent implications for businesses, policymakers, and citizens around the globe, especially given the enormous scale of the financing required to address the issue.

November’s 2024 United Nations Climate Change Conference (COP29) in Baku, Azerbaijan agreed to triple finance to developing countries, from a previous goal of $100 billion annually, to $300 billion annually by 2035. The conference has also resolved to secure efforts of all actors to work together to scale up finance to developing countries—from public and private sources—to the sum of $1.3 trillion per year by 2035.

However, the agreed amount is far lower than economists’ estimated need of at least $1 trillion per annum. Research outlined in a 2022 McKinsey Global Institute report indicated that up to $9 trillion per year would be required by 2050 if all physical assets across the developed and developing world are included.

COP29 was a wake-up call for companies. Today’s business environment differs considerably from the one that existed when many sustainability plans were developed: interest rates are higher, inflation is a persistent challenge, geopolitical circumstances are adding to energy and supply chain pressures, and the costs of sustainability projects have frequently been underestimated. Companies are core to the sustainability challenge and many businesses will need to re-evaluate their sustainability strategies as we move towards 2025.

Regional and Country Summary

In the advanced economies, equities soar as Trump wins second term; US and UK cut interest rates September; Eurozone returns to trade surplus.

United States

Trade deficit widened to $84.4 billion, the highest since April 2022; 0.25% Fed rate cut; stocks surge to record highs as Trump returns to presidency.

At November’s meeting considering the balance of risks in relation to its long-term goal, FOMC decided to lower the target range for the federal funds rate by 0.25 percentage points to 4.50–4.75 %.

September exports were valued at $267.9 billion, $3.2 billion less than August’s exports. September imports reached $352.3 billion, $10.3 billion more than in August. The monthly deficit climbed 19.2% to $84.4 billion in September.

The consumer price index rose 2.6% for the 12 months ending October, after rising 2.4% over the 12 months ending September. Core inflation slightly increased to 3.3% (annualized) in October. Consumers’ one-year-ahead inflation expectations at the one-year horizon dipped slightly to 2.9% (3.0% in September) and at the five-year horizon declined to 2.8 % from 2.9%, according to the September Survey of Consumer Expectations.

Retail and food services sales for October (adjusted for seasonal variation and holiday and trading-day differences) were $718.9 billion—a 0.4% increase from September. The consumer confidence index (Conference Board) increased in October to 108.7, up from 99.2 in September.

The unemployment rate remained unchanged at 4.1% in October (3.5% in January 2020). Total nonfarm payroll employment was essentially unchanged (up 12,000).

The industrial production index dropped slightly to 102.3 in October (102.6 in September). October’s purchasing managers’ index (PMI) for manufacturing was revised higher to 48.5 from a preliminary of 47.8, following a 15-month low of 47.3 in September. The services PMI decreased slightly to 55 (55.2 in September).

November saw US stock markets post their biggest monthly gains of the year to date. The S&P 500 gained 5.7% this month while the Dow Jones climbed 7.5% in November.

On the housing market, the 30-year fixed-rate mortgage increased to 6.8% by November 14 (6.5% in October). Existing home sales decreased by 1% in September. During October, housing residential starts decreased to 1,311,000 (down from a revised figure of 1,353,000 in September). Completions were down to 1,614,000 from 1,688,000 in September.

After a presidential race full of undecided voters, on November 5 Donald Trump was elected the 47th president of the United States. The Republican Party candidate won across all the so-called swing states (states that could potentially be won by either candidate) to achieve the 270 Electoral College votes needed to achieve victory. President-elect Trump exceeded polling expectations to carry the electoral college by 312 electoral votes; current vice president Kamala Harris won 226. Trump, who was also the first Republican to win the popular vote in 20 years, has trailed a range of policies including lowering regulations, taxes, and energy costs, a focus on illegal migration, and higher tariffs on foreign imports.

Eurozone

Nearly unchanged EC projections for eurozone; headline Inflation is at par with 2% target; eurozone trade surplus bounce back.

Q3 GDP growth was 0.2% quarter on quarter, and 1.0% year on year. Real GDP growth is expected to be 0.8% in 2024 and 1.3% in 2025, according to European Commission November projections. Compared to the spring projections, the GDP growth outlook is unchanged in 2024 and –0.1% for 2025. After prolonged stagnation, the EU economy began growing in the first quarter of this year. This growth continued at a steady but subdued pace through the second and third quarters, with inflationary pressures easing. Despite ongoing uncertainty, conditions seem favorable for a mild increase in domestic demand.

Eurozone trade bounced back to a €12.5 billion surplus in September 2024, from €4.6 billion in August. Goods exports in September 2024 reached €237.8 billion, compared with €216.7 billion in August. Imports were €225.3 billion, down by 0.6% month on month. This increase was mainly driven by an increase in the surplus for machineries and vehicles (from +€9.7 billion to +€13.8 billion) and a reduced deficit for energy (from –€25.7 billion to –€22.3 billion).

In the wake of below-target headline inflation, the ECB cut interest rates by 25 bps to 3.4% on October 17. ECB President Christine Lagarde stated that, with inflation in line with expectations, it was appropriate to take another step towards moderating the level of monetary policy restriction.

In October, headline inflation was at par with the 2% target, mainly due to declining energy prices (–4.5%), while core inflation stood at 2.7%. Services inflation was 4.0%, which still points to strong domestic price pressures, with wages growth remaining elevated (4.7% in 2024 Q2). Producer prices have been in positive territory since December but posted –0.6% month on month and –3.4% year on year in September 2024. The EU Commission’s November projections show inflation is expected to be 2.4% in 2024 (unchanged), 2.1% in 2025 (unchanged), and 1.9% in 2026 (unchanged). For core inflation, ECB staff projections are: 2.9% in 2024 (up by 0.1 pp), 2.3% in 2025 (up by 0.1 pp), and 2% in 2026.

The forward-looking indicator, Eurocoin ticked up to 0.18 in October from 0.14 in September. The industrial production index fell by 2.0% month on month and 2.4% year on year in August. The composite PMI stood at 48.1 in November versus 50.0 in October; the services PMI declined to 49.2 in November (October: 51.6), while the manufacturing PMI fell to 45.2.

Extensive destruction and tragic loss of over 200 lives resulted from severe flash floods which struck the Community of Valencia in November.

Germany was engulfed by political crisis when Chancellor Olaf Scholz replaced Finance Minister Christian Lindner (leader of the Free Democrats) with Jörg Kukies. Scholz now needs opposition support to push through new legislation, including the 2025 budget

United Kingdom

CPI inflation rose to 2.3% in October; quarterly GDP grew 0.1% in Q3 2024; BoE cut its policy rate in November and projects increase in both inflation and GDP growth. OBR also expects modest GDP growth against backdrop of increased government spending, taxation, and borrowing.

According to the Bank of England’s November Monetary Policy Report, consumer price index (CPI) inflation is expected to rise to around 2.75% by the second half of 2024, as last year’s declines in energy prices fall out of the equation. Inflation is expected to fall back to around the 2% target in the medium term. Quarter-over-quarter headline GDP growth is expected to reach around 1.25% each quarter in 2024, pick up to almost 1.75% by Q4 2025, and then decline slightly to 1.1% in 2026. According to the Office for Budget Responsibility’s October Economic and Fiscal Outlook, the economy is expected to grow by just over 1% this year, rising to 2% in 2025, before falling to around 1.5%, over the remainder of the forecast. Budget policies temporarily boost output in the near term but leave GDP largely unchanged in five years.

Quarterly real GDP is estimated to have grown by 0.1% quarter on quarter in Q3 2024, after growing by 0.5% in Q2 2024. Meanwhile, real GDP grew by 1% year on year in Q3 2024. The services sector grew by 0.1% on the quarter, the construction sector grew by 0.8%, while the production sector shrank –0.2%. The UK CPI increased to 2.3% in October, with higher electricity and gas prices partially offset by lower prices for recreation and culture. Core inflation (which excludes energy, food, alcohol, and tobacco) rose slightly to 3.3%, from 3.2% in September. On November 6, the BoE Monetary Policy Committee (MPC) voted to cut the policy rate to 4.75%.

The seasonally adjusted S&P Global UK Manufacturing PMI posted 49.9 in October, down from 51.5 in September. This is the first time that the PMI has fallen below the neutral 50.0 mark since April. A lack of market optimism, slower economic growth, stretched supply chains, and concerns about the impact of the UK Budget announcement drove the slowdown.

UK service sector output continued to expand in October, supported by another solid upturn in new work, but the rate of expansion eased for the second month running. At 52.0 in October, down from 52.4 in September, the headline UK Services PMI pointed to the slowest increase in output levels since November 2023—although it has remained in positive territory during each month since.

PMI data also indicated that output growth slowed considerably across the UK’s construction sector after reaching a 29-month high in September. The UK Construction PMI registered 54.3 in October, down from September’s 57.2, but remained above the crucial 50.0 no-change threshold for the eighth month running. The latest reading was also well above the average seen in the first half of 2024 (51.4) and signaled a solid expansion of total industry activity.

In Q3 2024, growth in average total pay was 4.3%, as real total pay rose 1.4%. UK unemployment was estimated at 4.3%. The UK economic inactivity rate (for people aged 16 to 64 years) was estimated at 21.8% in July to September 2024 (below year-ago estimates) and decreased in the latest quarter. The estimated number of vacancies in August to October 2024 was 831,000, a drop of 35,000 (4%) from May to July 2024. Vacancies declined for the 28th consecutive period, falling in 16 of 18 industry sectors.

November saw Prime Minister Sir Keir Starmer pledge to reduce UK carbon emissions by 81% by 2035 (compared to 1990 levels) at the 2024 United Nations Climate Change Conference (COP29) in Baku, Azerbaijan. Meanwhile, the October 30 Autumn Budget has received a mixed response. Previously exempt UK agricultural assets worth over £1 million become liable for 20% inheritance tax (half the standard rate) from April 2026, sparking a campaign by the farmers’ union and a major protest by farmers in central London on November 19. Additionally, the CBI released a survey indicating nearly two-thirds of firms consider that the Budget will damage UK investment, with half of firms also looking to reduce headcount.

In emerging economies, China recovery gathers strength as it announces further stimulus measures; inflation concerns in India; Brazil hikes Selic rate.

China

China’s economic recovery showed signs of strengthening in October. The slowdown in the real estate market notably eased, and exports expanded at a faster pace. Industrial production, investment, and employment remained largely stable.

Industrial output growth stabilized in October, registering a 5.3% increase (5.4% in September). The manufacturing and mining sectors saw industrial production growth rates increase to 5.4% and 4.6%, respectively (versus 5.2% and 3.7% in September); industrial production growth in the utility sector decelerated to 5.4%, down from 10.1% in September.

Growth in fixed-asset investment held steady at 3.4% in October. Manufacturing investment growth was robust, hitting 10.0% year on year in October (9.7% in September). Utility investment accelerated to 5.8% year on year in October, up from 2.2% in September. However, real estate investment declined further: −14.2% in October (down from −10.6% in September).

The slowdown in the real estate market showed signs of easing in October. Demand-side indicators revealed a rebound, with sales revenue of new residential properties growing by 0.8% (−16.8% in September). However, on the supply side, floor space started decreased by −25.7% in October (−17.7% in September). After experiencing a three-year real estate slump, the amount of floor space sold in new houses has been cut by half from its peak, returning to levels last seen in 2010. Additionally, the amount of floor space started has now declined to levels comparable to those of 2007.

New social financing decreased to RMB 1.4 trillion in October, down from RMB 3.8 trillion in September. On a year-over-year basis, it declined by −24.1% in October. This contraction in new social financing can be attributed to a decrease in new government bond issuance.

The overall surveyed urban unemployment rate dropped slightly to 5.0% in October, down from 5.1% in September. Similarly, the youth unemployment rate decreased to 17.1% in October, slightly down from 17.6% in September.

Cross-border trade picked up pace in October, growing by 6.1%, up from 1.5% in September. This increase was primarily driven by a surge in exports growth, which rose to 12.7% from 2.4% the previous month. However, imports growth turned negative, falling to −2.3% in October from 0.3% in September.

Inflation remained low, with the CPI registering a modest 0.3% in October, a slight dip from September’s 0.4%. Meanwhile, producer prices posted a decline of −2.9% in October, compared to −2.8% in the previous month.

China saw negative FDI inflows (net withdrawals) in Q3, totaling −$8 billion (−$15 billion in Q2), according to State Administration of Foreign Exchange.

In early November, the Ministry of Finance unveiled a five-year package totaling RMB 10 trillion aimed at swapping existing hidden government debt. It is estimated that the swap will save local governments approximately RMB 600 billion in interest payments over this period.

India

India’s economy grew by 5.4% year-on-year in Q3 2024, reflecting a slowdown compared to the 7–8% growth seen in recent quarters. Looking ahead to the next quarter, the services and manufacturing sectors remain strong drivers of growth, although rising inflation could dampen consumer activity.

The latest GDP figures for Q3 2024 show that, on a seasonally adjusted basis, investments remained broadly unchanged, while household consumption declined. Retail inflation surged to a 14-month high of 6.21% in October, up from 5.5% in September. This rise was largely driven by food inflation, which reached 9.7% year-on-year in October. The government expects food inflation to ease in the coming months, citing a robust summer harvest for crops.

High inflation continues to be a major concern for consumption patterns. However, the impact on retail and vehicle sales has been limited so far. According to the Retailers Association of India, retail sales increased by 5% in September, while vehicle sales in October reached near-record levels.

Inflation currently sits outside the central bank’s target range of 2–6%. Despite this, the Reserve Bank of India (RBI) has kept interest rates unchanged, anticipating that inflation will ease soon.

In October 2024, the manufacturing sector maintained its expansionary momentum, with the manufacturing purchasing managers index (PMI) reaching 57.5. This strong performance was driven by robust demand for goods and steady production growth.

Similarly, the services sector expanded, with the services PMI increasing to 58.5, indicating healthy growth across multiple industries. Together, these metrics led to a composite PMI of 59.1, signaling broad-based improvements in economic activity.

Industrial production data for September 2024 showed a year-on-year growth of 3.1%. The manufacturing sector grew by 3.9%, electricity production increased by 0.5%, and mining activity recorded marginal growth of 0.18%. These trends highlight the manufacturing sector’s resilience.

The labor market showed signs of strength in November, with robust growth in the services sector driving record job creation. Employment surged at the fastest rate since December 2005, reflecting a healthy economy and rising consumer spending power.

The Reserve Bank of India remains optimistic, projecting GDP growth of 7.2% for the fiscal year ending March 2025. This forecast is supported by government investments and a rebound in rural demand. However, economists caution that persistent inflation and subdued urban consumption could pose risks to sustained economic growth.

Brazil

Inflation continued its upward trend; COPOM hikes rates by 0.5% this month; composite PMI rose; unemployment rate fell slightly.

Inflation climbed to 4.76% in October (4.42% in September), increasing for the second consecutive time and breaching the Central Bank’s target upper limit (4.50%). Brazil’s central bank raised the benchmark Selic interest rate by half a percentage point to 11.25% in November (from 10.75%).

Consumer confidence remains below the neutral 100 mark and ticked down to 93.0 in October (93.7 in September), decreasing for the first time in five months. Business confidence rose to 98.1 in October (97.4 in September), continuing its upward trend.

The purchasing managers’ index (PMI) for manufacturing fell slightly to 52.9 in October (53.2 in September), remaining above the neutral 50 mark for a tenth month running and indicating modest expansion. Despite falling, the latest reading was consistent with a solid pace of growth. An improvement in international demand for Brazilian goods fueled output growth. Total new orders rose further, although to a lesser extent than in September. Job creation remained historically elevated, while business optimism strengthened. Meanwhile, the latest data indicated lower increases in both input costs and selling prices.

October saw the services PMI climb to 56.2 in October (from 55.8 in September). This month’s data reflected a combination of stronger growth and rising cost pressures across Brazil’s service economy. The latest rate of expansion was the second highest in 28 months (behind July), driven by positive demand trends and new business gains. Not only did sales rise for the 13th month in a row, but also with the biggest rise since mid-2022. The composite PMI was up slightly from 55.2 to 55.9 in October, staying within the expansion zone for a 13th consecutive month.

On the financial markets, the monthly average exchange rate was BRL 5.63 per US dollar in October (5.54 in September). October saw the Bovespa equities index drop, losing 1.6% in value.

The balance of trade registered an October surplus of US $4.3 billion, versus US $5.4 billion in September, driven by an increase in imports (US $25.1 billion in October compared to US $23.4 billion in September) and exports (US $29.5 billion in October versus US $28.8 billion in September).

Meanwhile, the three-month moving average unemployment rate dropped to 6.4% in September (6.6% in August), down for the sixth time this year, and lower than the same period last year (7.7%).

Russia

Economy slowing towards end of 2024; further outlook depends on fiscal policy; steady fiscal position; trade surplus shrunk; inflation remains elevated, and monetary policy tight.

Recently published Q2 GDP data show growth slowed sharply, to 0.5% quarter on quarter (seasonally adjusted) from 1.0% in Q1, driven mainly by household consumption and with net exports as the biggest drag,

In the second half of the year the Russian economy is slowing, with full-year growth estimated at around 3.5%. Household demand, which has been the main driver of growth from Q1 to Q3, is facing the effects of significant monetary policy tightening and the related prohibitively high cost of unsubsidized loans. Annual growth in the total output indicator slowed in Q3 to 2.9% year over year from 5.5% in Q2. In the same period, retail sales cooled to 6.1% from 7.5%, realizing no growth on a quarterly basis. Similarly, industrial production growth decelerated from 4.2% to 2.6% and decreased by 0.7% quarter on quarter. 

Growth forecasts for next year depend strongly on levels of government support, as tight monetary policy may affect household spending. The relaxed fiscal policy will provide an impetus in early 2025 and help to maintain positive but slower growth next year. However, this may only be temporary, as the government has also approved fiscal consolidation next year. Higher crude oil production quotas could boost net exports as a growth engine, as cuts in export volumes have made an impact in 2024. Overall, 2025 GDP growth is forecasted at between 1.0 and 1.8%.

The federal budget has been almost balanced over January to September. The recent increase in the annual deficit target to 1.7% of GDP, from 1.1%, signals fiscal loosening in the final weeks of this year. Budget revenues have overperformed this year owing to the boost to the tax take from rapid growth. The fiscal position has been supported by steady oil exports, which maintained values slightly lower than in Q2 as Russia reduced its output in line with OPEC+ commitments.

The trade balance shrank to $32 billion in Q3 from Q2’s $35.8 billion—the US dollar value of goods exports contracted 3.7% year on year as the value of imports rose by 0.4%. October’s figures show imports declining to $24.2 billion (compared to an average Q2 level of $25.6 billion), contributing to the trade surplus reaching $11.8 billion (compared to an average Q2 level of $11.0 billion).

In October, consumer inflation remained elevated at 8.5% annually and the monthly measure picked up to 0.7% from 0.5%. A strong underlying inflationary trend persists, as reflected by monthly core inflation accelerating to 0.8% from 0.7%. These developments were driven by fast-growing wages fueling demand and utility tariff hikes that boosted inflation expectations. Amid high inflation, the Central Bank of Russia (CBR) raised its key rate to 21% in October, bringing cumulative tightening since June to 500 basis points. The bank also reiterated a hawkish message, warning that it will hike again soon if inflationary pressures fail to abate. Another hike in December remains likely.

Mexico

Inflation rose to 4.8%; manufacturing sector experiences softer deterioration; balance of trade deficit reduces.

In October, the inflation rate rose to 4.8% (from 4.6% in September), turning up after a downward trend over the previous two months, and remaining outside the Central Bank’s target range of 2–4%. October’s closing consumer price index (CPI) was up 4% from September, due to an increase in the food and beverages sector.

Consumer confidence was stable in September at 105.5, remaining above the neutral 100-point mark and at the highest level among OECD countries. In October, Mexico’s purchasing managers’ index (PMI) for manufacturing rose from 47.3 in September to 48.4, consistent with a softer deterioration in the health of the sector that was modest overall compared to previous months. Still, Mexico continues to experience challenging business conditions. Driven by a prolonged decline in new business inflows, firms reduced production volumes, laid off workers, and trimmed their input purchases.

Total unemployment dropped by 0.02 percentage points in September, reaching 2.74%. During the same period, formal employment grew by approximately 91,000 workers, with the largest increases reported in the agriculture and social services sectors.

On the markets, the monthly average exchange rate in October was MXN 19.7 per USD (up from MXN 19.6 in September), the highest this year.

September’s balance of trade registered a deficit of around US $580 million (a significant decrease from the $5 billion trade deficit in August). Exports totaled US $49.6 billion (down from US $51.9 billion in August), against imports of US $50.2 billion (down from US $56.8 billion in August). The drop in imports in Mexico is largely due to a slowdown in its manufacturing sector, reducing the need for imported intermediate goods, and Mexico’s strategy to decrease reliance on foreign oil products. This has been compounded by stagnant exports, especially to major trade partners like the US, particularly in sectors like automotive manufacturing. These factors highlight a combination of external demand pressures and internal policy changes that are affecting trade.

Mexico’s Congress has approved a reform to eliminate seven autonomous bodies, including the National Institute for Transparency and Access to Information (INAI), redistributing their functions to government ministries. Critics argue this undermines transparency while granting the government control over oversight and access to significant funds for redistribution.

The Supreme Court has closed any possibility of changing the judicial reform instituted by the ruling party. Around 1,700 federal-level judicial positions will have to be voted for at the polls in two elections, one in 2025 and another in 2027. The National Electoral Institute (INE), which will oversee the unprecedented and complex elections, has budgeted a public expenditure of at least $656 million for next year’s election.

McKinsey’s Global Economics Intelligence (GEI) provides macroeconomic data and analysis of the world economy. Each monthly release includes an executive summary on global critical trends and risks, as well as focused insights on the latest national and regional developments. Detailed visualized data for the global economy, with focused reports on selected individual economies, are also provided as PDF downloads on McKinsey.com. The reports available free to email subscribers and through the McKinsey Insights App. To add a name to our subscriber list, click here. GEI is a joint project of McKinsey’s Strategy and Corporate Finance Practice and the McKinsey Global Institute.

The data and analysis in McKinsey’s Global Economics Intelligence are developed by Jeffrey Condon, a senior expert in McKinsey’s Atlanta office; Krzysztof Kwiatkowski is an expert in the Greater Boston office; and Sven Smit, a senior partner in the Amsterdam office.

The authors wish to thank Nick de Cent, as well as José Álvares, Cristina Barrantes, Darien Ghersinich, Yifei Liu, Marianthi Marouli, Tomasz Mataczynski, Frances Matamoros, Jose Maria Quiros, Erik Rong, Valeria Valverde, and Sebastian Vargas for their contributions to this article.

The invasion of Ukraine continues to have deep human, as well as social and economic, impact across countries and sectors. The implications of the invasion are rapidly evolving and are inherently uncertain. As a result, this document, and the data and analysis it sets out, should be treated as a best-efforts perspective at a specific point of time, which seeks to help inform discussion and decisions taken by leaders of relevant organizations. The document does not set out economic or geopolitical forecasts and should not be treated as doing so. It also does not provide legal analysis, including but not limited to legal advice on sanctions or export control issues.