The Q1 2024 U.S. Regulatory Update covers federal agency announcements, Congressional news, and senior regulatory appointments. This edition includes the recent SEC Rule on climate disclosures and the Federal Reserve's 2024 stress test scenarios.

Saudi Arabia's short-term macroeconomic outlook remains favorable, despite tighter global financial conditions. We expect non-oil growth to remain robust at 5%, driven by consumption and investment. The current account will continue to narrow, while capital outflows will outweigh capital inflows.

Sustained strong wage increases should lead to consumption-driven growth. We forecast inflation to decrease gradually, but to persist above target through 2025. Structural rigidities, such as sizable dividend payments, will keep the C/A deficit large.

Sovereign credit ratings are fundamental to ensuring that countries—particularly vulnerable low-income countries— have access to long-term financing from international private investors. Enhancing dialogue between borrowing countries and credit rating agencies via robust investor relations programs can better inform credit ratings and support access to international markets.

The US has seen an important increase in labor productivity … … attributed to technological innovation, supportive fiscal policies and labor flexibil...

The ANC has been losing popularity due to new parties coming on board and stagnant economic growth. Polls suggest some provinces will form coalitions, but the ANC will likely retain national power. The ANC’s five-year plan hinges largely on a continuation of their current policy priorities.

Strong activity, supported by nearshoring opportunities, has lifted market sentiment. Pre-election public spending will complicate fiscal consolidation in 2025. Favorable external conditions should help sustain growth, but we remain cautious about medium-term prospects.

This week’s Digital Finance Developments discusses recent developments in artificial intelligence (AI) policy, including EU AI Act passage and next steps, responses to the U.S.’s Executive Order on AI, and efforts to coordinate these and other policies from the G7 and United Nations.

China's announced headline fiscal deficit of 3.0% of GDP is only the deficit of a narrow fiscal account. The consolidated fiscal deficit in 2024 can be as high as 8.2% of GDP, higher than last year's actual fiscal deficit of 7.0% of GDP.

Consumption remains strong, despite tighter monetary policy. Further monetary tightening and slower depreciation would help ease inflation. The current account deficit looks set to narrow in 2024, which should help authorities maintain Lira stability into 2025.

We maintain a cautious view on the impact of US sanctions relief on Venezuela's oil sector. Prospects hinge on the extent of sanctions reimposition, including licenses for private oil companies. We project real GDP growth of 4.2% in 2024, amid higher oil production and a decline in inflation.

Global climate flows surpassed $2 trillion in 2023—up from $1.4 trillion in 2022. While still well short of the estimated $8.1 trillion annual pace needed to achieve net-zero emissions by 2050, the pickup reflects the strong growth in climate finance commitments in recent years.​

The labor market saw once again a surge in employment growth … … however, this increase is largely restricted to a few sectors. Layoffs have increas...