2024 Insights: Navigating Through BlackRock's Economic Forecast

Understanding the trends and processes of the economy during unstable times is crucial. We depend on the expertise and analysis of financial giants like BlackRock. For our readers, we have reviewed BlackRock Investment Institute's global outlook for 2024 to highlight the key points. 

The balance of optimism and pessimism 

Throughout 2023, there have been several moments when market optimism was reignited, fueled by the belief that the economy could achieve a soft landing — a return to target inflation rates without plunging into a recession. However, while hope is resilient, it's not immune to the realities of economic challenges. Despite witnessing some growth, we're yet to fully recover from the pandemic-induced downturn. 

This is a regime shift, not about whether a recession happens. So, it doesn’t make sense for investors to wait for the macro environment to improve, in our view. We think investors should seek to neutralize macro exposures or – if they have high conviction – be deliberate about which exposures they take. We see more scope to outperform the market now than in the less volatile Great Moderation.

We are currently experiencing modest growth amidst higher inflation, increased interest rates, and greater market volatility. BlackRock advises investors to focus on adapting to this new environment rather than relying on traditional cyclical strategies. 

BlackRock emphasizes a crucial observation: We are witnessing a shift that is fundamentally structural. Unlike cyclical changes, which are temporary fluctuations tied to the business cycle's natural phases (growth, peak, recession, and recovery), structural changes are deep-rooted transformations. These alterations fundamentally reshape the economy's core structure and operation framework, suggesting a permanent evolution rather than a mere temporary adjustment. 

BlackRock's strategy for portfolio management 

The present climate of heightened volatility and market variability demands a more active portfolio management approach. Although structurally higher policy rates are expected to yield higher returns across all assets eventually, not all asset valuations have yet adjusted. BlackRock highlights the increased significance of alpha, or above-benchmark returns, advocating for a dynamic portfolio strategy, especially when cash offers attractive returns. Since 2020, insightful and timely actions have surpassed the returns of buy-and-hold strategies. 

Harnessing mega forces 

BlackRock introduces the concept of mega forces in its 2024 global outlook, identifying them as significant, structural changes shaping the investment landscape both now and in the foreseeable future. These forces are the main drivers behind an era characterized by increased macroeconomic and market volatility, altering long-term growth and inflation projections. They are expected to prompt considerable shifts in profitability across economies and sectors, presenting both substantial opportunities and risks for investors. The far-reaching impacts of these mega forces are gradually being recognized in the markets, potentially offering investment prospects that are not directly tied to macroeconomic cycles. 

Mega forces outlined by BlackRock 

Low-carbon transition 

The escalating effects of climate change are fueling a demand for solutions geared toward enhancing climate resilience. This focus on preparing for, adapting to, and recovering from climate-related hazards has become a notable investment theme within the broader strategy of transitioning to low-carbon economies. 

Digital disruption 

Breakthroughs in computing hardware and deep learning have marked a pivotal moment for artificial intelligence in late 2022, with expectations of exponential progress due to accelerating innovation. The resilience of tech sector earnings is anticipated to continue, significantly contributing to corporate profit growth in 2024. 

Future of finance 

The financial landscape is rapidly evolving, transforming how individuals and businesses manage cash, engage in transactions, and seek returns. The increasing capital pressures on traditional banks are paving the way for private credit and non-banking institutions to address the growing demand for lending services. Demographic divergence 

The global divide between aging and youthful economies is becoming more pronounced. High-income countries face a declining working-age population, which could limit economic production and growth, while low-income economies expect a surge in their labor force. This demographic shift poses challenges for government spending and debt management. 

Geopolitical fragmentation 

Moving away from the post-Cold War era of globalization, nations are now prioritizing national security and resilience. This shift towards geopolitical fragmentation and economic competition is anticipated to boost investment in strategic sectors, including technology, energy, and defense. 


For the full global outlook, visit BlackRock's 2024 Outlook.

Share with friends

Start investing and backup your future with Nectaro

A licensed European investment platform.

Investing in financial instruments involves risk. Keep in mind that there's no absolute guarantee of getting back the full invested amount.

SIA Nectaro (registration nr. 40203016025; legal address: Jeruzalemes 1, Riga, LV-1010, Latvia) is an authorized investment platform with an IBF license Nr. 27-55/2023/3 supervised by Latvijas Banka (address: K. Valdemara 2A, Riga, LV-1050, Latvia)

Nectaro is a member of the national investor compensation scheme established under EU Directive 97/9/EC. The scheme protects investors by providing compensation if Nectaro fails to return financial instruments or cash to investors. The maximum compensation an investor can claim under the scheme is 90% of their net loss, up to a maximum of €20 000.

© 2024 Nectaro. All rights reserved.