Although 2024 will mark a change in the cycle in inflation and interest rates, it is also shaping up to be a promising year to invest. Fixed income is positioned as a star asset that will allow inflation to be beaten without assuming very high risks, but at the same time good performance is expected from equities, as highlighted by BBVA experts at the Perspectives 2024 meeting, organized by the entity. next to EXPANSION.
In the current scenario of deceleration, especially in advanced economies, "in 2024 we are going to have global growth of around 3%, similar to the pace of the last year," said Rafael Doménech, head of economic analysis at BBVA Research. . On the other hand, he referred to the main threats to take into account. "We have the risk of inflation, how much it will cost the real economy to digest interest rates that will remain high for some time and, finally, the slowdown of the Chinese economy," Doménech warned.
Along with these macroeconomic risks, geopolitical tensions will condition the current course. "Geopolitical risks, together with growing populism in some geographies, are going to generate an environment of greater uncertainty and volatility," said Sonsoles Castillo, head of economic and financial analysis at BBVA Research, who highlighted the favorable evolution of inflation in the last anus. For this reason, Castillo added that "the next movement of the central banks will be downward, but for now they will be cautious. We expect the first rate cuts towards May or June, and gradually."
As a consequence of these factors, "we will have to get used to tepid growth in the long term: the working-age population shows a downward trend and productivity gains are scarce in many economies," said Joaquín García, director of global strategy. from BBVA Asset Management
On the other hand, "the expansive fiscal policy after the pandemic has contributed to mitigating the impact of the crisis but has also generated large debt, so it seems reasonable to shift towards budget stability," said Roberto Hernanz, head of private banking markets. of BBVA in Spain. At the investment level, Hernanz stated that "our most convincing bet is fixed income, but it should also be a good year in equities if this thesis of a soft economic landing is fulfilled." In particular, he advocated for European, Japanese or Chinese stock exchanges, to the detriment of the American one.
For Álvaro Manteca, head of private banking investment strategies at BBVA in Spain, "fixed income will be the winning asset of 2024 according to the binomial between profitability and risk." There could be a slight decline in bond yields in the coming months as economies cool and inflation returns to its long-term targets. Within fixed income, Manteca highlighted the attractiveness of higher quality corporate credit, since "we think it is more protected against the economic slowdown scenario than high yield credit."
Belén García-Moya, director of advisory and high net worth private banking at BBVA in Spain, highlighted the growing investment opportunities in start-ups, unlisted companies, private equity, private debt, infrastructure and real estate: "The common factor is that they are "normally illiquid investments, but tend to have lower volatility in times of market stress." Finally, García-Moya recalled the importance of diversification and identified the four megatrends that BBVA is focusing on this year: "Technological disruption, demographics, new consumer habits and sustainability."