The global economy is decelerating, but at different rates in different parts of the world. Lower inflation, high employment and rising real wages will continue to support a soft landing. Key interest rates have peaked, and the US Federal Reserve will begin its rate cutting cycle by the middle of next year. This will contribute to a moderate recovery during the latter part of our forecast period. Meanwhile geopolitical turmoil is creating growing downside risks. The question of how well economies – and the financial system – can continue to withstand increasingly tight financial conditions is another uncertainty.