(Reuters) - Global political and business leaders will meet in the Swiss resort of Davos next week against a complex geopolitical backdrop beset by war, tectonic shifts in monetary policy, climate change and an uncertain election-packed year.
The global economy appears to be avoiding recession for now, but a key litmus test looms for China with GDP figures, while U.S. retail sales data will shed light on its 2024 outlook.
Here's a look at the week ahead in global markets from Kevin Buckland in Tokyo, Li Gu in Shanghai, Ira Iosebashvili in New York, Karin Strohecker, Stefania Spezzati and Amanda Cooper in London.
1/ GROWING PAINS
Just how close China got to realising the official 5%-or-so growth goal for 2023 will become clear on Wednesday, with the release of full-year GDP figures.
That it hit the target is not really in question. The challenge is how to do the same this year, if Beijing follows its advisers and keeps the goal unchanged. Unlike last year, there's no 2022 COVID-lockdown slump to flatter the result.
A hint of what Beijing has planned has come from a key central bank official, who was reported by state media as saying policy tools would be used to support reasonable credit growth.
Chinese government bond yields have neared a nearly four-year trough and the yuan slid to a one-month low, as the market speculated on a rate cut as soon as Monday.
2/ DAVOS
The 54th annual World Economic Forum meeting kicks off in the Swiss ski resort of Davos. Central bankers, financiers and business leaders will discuss a challenging global economic picture, shifting monetary policy and rising debt levels.
They will try to seek answers on how to navigate a complex geopolitical framework that includes war in Ukraine and Gaza. U.S. Secretary of State Antony Blinken, French President Emmanuel Macron and key Middle East leaders are due to attend.
One key event is the Jan. 17 closed-door Financial Services Governors Meeting, which will bring together 100 chairs and CEOs from banking, markets, insurance and asset management.
A separate survey released by the WEF showed extreme weather and misinformation were seen by risk specialists as most likely to trigger a global crisis in the next couple of years.
3/ ELECTION MANIA
Taiwan heads to the polls on Saturday to elect a new president and parliament under the shadow of its increasingly assertive neighbour China, which says the vote is a choice between "peace and war".
The high-stake geopolitical event marks the start of one of the busiest election years ever: countries making up over 60% of the world's economic output and more than half of its population hold elections this year.
The United States, Britain, Russia, South Africa, India and Indonesia are just some of the more than two dozen countries holding national elections.
The heavy election calendar has fuelled fears that financial market volatility could soar and fiscal discipline be at risk as growth prospects face and debt hits record highs.
4/ SHOPPING AROUND
The health of U.S. consumers will be in the spotlight, through the lens of retail sales data and bank earnings.
The Jan. 17 retail sales numbers are expected to give a glimpse into consumer spending and offer evidence of the resilience of the U.S. economy in the face of 525 basis points of rate increases from the Federal Reserve since 2022.
Signs that consumers may be pulling back might undermine the expectation of a economic soft landing that helped boost stocks 24% last year. Economists polled by Reuters expect retail sales rose a monthly 0.3% in December, matching November's increase.
Investors are also keen to hear what big financial institutions say about consumers and their own operations, with Goldman Sachs and Charles Schwab (NYSE:SCHW) both reporting.
5/ BRIT-FLATION
The next batch of UK consumer price data could be exactly what Bank of England officials and politicians are hoping for: a big enough slide to declare victory on the war on inflation.
With headline inflation at 3.9%, the UK doesn't look like such an outlier any more compared with other developed nations -- a welcome development for a government expected to hold a general election later this year.
Typically stickier price pressures, such as those in services and workers' wages, are softening, but only marginally. And the near-21% rise in inflation since 2020 still outstrips that of any other G7 economy and is the joint-highest increase in western Europe.
The pound has got off to a relatively firm start to the year, supported by a rise in UK government bond yields. A soft read of inflation on Jan. 17 may prove an unwelcome development for sterling bulls.