the World Economic Forum chief economists has said that the latest survey reveal that the global economic outlook is “fraught with uncertainty. About 56% of the economists said they expect the global economy to weaken in 2024 saying that, geopolitical fragmentation around the world will deepen.
87% of respondents expect recent geopolitical developments to stoke global economic volatility in the next three years, and eight out of ten expect it to heighten volatility in stock markets,” WEF said in its report.
The majority of economists surveyed by the World Economic Forum have low confidence. The survey of 30 chief economists between November and December last year found uncovered this.
While there are positive developments, such as easing inflationary pressures and advances in the field of artificial intelligence (AI), businesses and policy-makers face persistent headwinds and continued volatility as global economic activity remains slow, financial conditions remain tight and geopolitical rifts and social strains continue to grow.
The International Monetary Fund, meanwhile, expects global economic growth to fall slightly in 2024 to 2.9%, from 3% last year.
WEF’s survey shows significant divergence among economists’ expectations for different economies, with the experts most bearish on Europe’s prospects. Some 77% of those surveyed expect growth in the region to weaken this year — that’s almost double the figure recorded in September’s survey.
The economists also turned more negative on the U.S.’s outlook. In the previous survey, 78% forecast moderate or higher growth this year, whereas the latest research sees that number fall to 56%.
Respondents were broadly positive and unchanged on their outlooks for South Asia, and East Asia and the Pacific, but struck a more cautious tone on China, with the majority (69%) now expecting only moderate economic growth.
Of particular concern to the economists was geopolitical rifts, with 69% of economists saying they expect the pace of geopolitical fragmentation to accelerate in 2024.
It comes after a year of heightened geopolitical tensions, with Russia’s war in Ukraine continuing, China-U.S. relations remaining fraught, and fears of a broader conflict in the Middle East due to the war between Israel and Hamas.
Over 75 nations, including major economies like the United States and the United Kingdom, will hold elections in 2024, bringing an unprecedented number of voters to the polls.
A more positive outcome of WEF’s survey of economists was inflation expectations, with a loosening of financial conditions expected by 70% of respondents.
Economists’ expectations of high inflation fell across all regions, with particular improvement seen in Europe and the U.S., although the report notes that two-thirds of those surveyed still expect moderate inflation in both regions.