Around 56% of top global economists predict that the world economy will weaken in the coming year, according to a survey by the World Economic Forum (WEF).
While regional growth expectations vary, none are expected to do particularly well in 2024 with 77% of respondents predicting “weak or very weak growth” in Europe and around 60% expecting “moderate or stronger growth” in the U.S., Middle East and North Africa, according to the WEF survey. Around 70% of economists also expect a further separation of world economies, fueled by geopolitical risks, increased localization and tightening economic blocs.
“The latest Chief Economists Outlook highlights the precarious nature of the current economic environment,” Saadia Zahidi, managing director of the World Economic Forum, said in the survey. “Amid accelerating divergence, the resilience of the global economy will continue to be tested in the year ahead. Though global inflation is easing, growth is stalling, financial conditions remain tight, global tensions are deepening and inequalities are rising.”
The economists surveyed did express hope for the future economy, with 77% saying that labor markets will loosen while 70% thought that financial conditions will ease, according to the WEF. Top economists were especially optimistic about Asia, expecting the southern and eastern regions to have “moderate growth,” but were less optimistic about China, with 69% foreseeing “moderate growth.”
Oil prices *fell* during the 2008 financial crisis. What happens if a combination of inflationary deficit spending and geopolitical issues pushes the price of oil *higher* if and when the US enters into a recession the next time?https://t.co/ovBss7kUb0
— David Sommers (@dgsommersmkts) January 14, 2024
Around 94% of those surveyed expect generative artificial intelligence to have economically significant productivity benefits in high-income economies and 53% in low-income economies over the next five years, according to the WEF. Economists were also optimistic about inflation in 2024, which has plagued the global economy over the past few years, with only 13% expecting high inflation in the U.S. and Europe.
The global economy is facing a number of risks going into 2024, including the conflicts in Ukraine and the Levant, which are threatening trade and oil supplies. Iran-backed Houthi rebels from Yemen have launched a number of attacks on ships traveling through the Red Sea, disrupting global trade routes, in response to the war between Israel and Hamas
Will Kessler on January 15, 2024