Davos Experts See Subdued World Economy in 2024, Regional Divergence Expected
By April Fowell
According to a survey of leading economists issued on Monday, the global economy faces a year of muted growth expectations and uncertainty owing to geopolitical unrest, tight financing conditions, and the disruptive influence of artificial intelligence.
Every year, in advance of the World Economic Forum's (WEF) annual conference in the Swiss resort town of Davos, a poll of more than sixty senior economists from both the public and private sectors is conducted in an effort to identify policymakers' and business leaders' top objectives.
About 56% of respondents believe that this year will see a decline in the overall state of the global economy, with significant regional variation. It was widely agreed that Europe will only manage poor or very weak growth, whereas majorities expected moderate or greater development in China and the US.
Most respondents in South Asia and East Asia and the Pacific saw at least modest growth in 2024, which is a more optimistic picture.
Even if comments from the world's leading central banks indicate that interest rates have peaked, 70% of respondents still anticipated a loosening of financial conditions when inflation declines and the labor market's present tightness lessens.
The impact of artificial intelligence on the global economy was seen to be uneven: whereas 94% of respondents anticipated that AI will greatly increase productivity in high-income nations over the next five years, just 53% projected the same for low-income economies.
In a related development, the WEF published a research on the "quality" of economic growth in 107 economies, which came to the conclusion that most nations are expanding in ways that are neither socially nor ecologically inclusive.
According to World Economic Forum Managing Director Saadia Zahidi, "reigniting global growth will be essential to addressing key challenges, yet growth alone is not enough."
The WEF announced the start of a campaign to formulate a new strategy for growth and assist decision-makers in striking a balance between it and other goals, such as social and environmental.
US & China
The two biggest economies in the world, China and the United States, are expected to decline in the upcoming year after seeing respectable growth in 2023, according to the World Bank.
The growth of the United States is expected to slow down from 2.5% in 2023 to 1.6% this year, while China's growth, which has historically been a major driver of the global economy, is predicted to decline from 5.2% to 4.5%.
The cause of China's downturn, which comes after a year in which the nation recovered after enacting stringent regulations during the epidemic, is longer-term structural problems as well as poor consumer confidence.
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