2024: What the 'gurus' predict for an ever-changing world – The Financial Post

Geopolitical challenges, elections in powerful economies, the trajectory of interest rates, the spread of artificial intelligence and efforts to transition to a greener environment amid major climate changes are major challenges for the European and global economy in 2024.

The Economic Post today presents Kazamias 2024, with contributions from international media, authoritative and authoritative global information, leading houses and international analysts who advance predictions in an ever-changing world.

Battles: How the foggy landscape is evolving – what to expect in 2024

– In geopolitics, two major conflicts are already underway in Ukraine and the Gaza Strip, and nobody can predict what will happen next as the thermometer rises in many parts of the world – from Europe to the Middle East and from there to China. With the fights that started for Taiwan.

– Key elections could be the start of greater stability – or the start of new instability – as countries including the US, India and Indonesia go to the polls in 2024.

– Major central banks, and notably the US Federal Bank and the European Central Bank, are called upon to decide when and how much to change policy after a year and a half of very high interest rates.

-Artificial Intelligence (AI) seems unstoppable with ongoing developments – and concerns about how it will affect not just businesses, but employment and ultimately society as a whole.

– Many promises have been made for a green transition at a time when the world's climate is changing, and many experts are warning that we are approaching or have reached a point of no return unless immediate action is taken.

There are many predictions, some less optimistic, with a common denominator about the changes and challenges around much of society and the economy today:

Thomson Reuters

Democracy faces many threats and pressures around the world. While this is consistent growth over the years, the International News Agency warns that 2024 will be a particularly tense year as more than 50 countries and regional bodies head towards crucial elections.

One of the most important elections is going to be held in the United States. “This will be a defining moment for the future of American democracy, marred by partisan polarization, misinformation, voter suppression and attacks on the integrity of the electoral system,” it said. India, the world's most populous country, will now hold important elections.

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Taiwan is expected to continue to be a sticking point for US-China relations as the island, which China considers its sovereign territory, prepares for democratic elections in mid-January. The election in Indonesia, the world's largest Muslim-majority country and a growing economic power, will be a test of its democratic resilience and its role in Southeast Asia.

On the economic front, four years after the outbreak of the pandemic, “the international economy remains weak and uncertain. The pandemic has exposed and intensified the structural weaknesses and vulnerabilities of an interconnected global economy that is beginning to break down into competing blocs. Potentially only in its early stages (…) the overall restructuring of global trade (…) will have a significant impact on the world. “Supply chains will be reshaped, relationships between firms will need to be adjusted, and new competition will undoubtedly emerge,” he estimated. Inflation continues to be a major challenge facing the global economy through 2024.

Bloomberg

The hottest year on record, endless wars, deep polarization: 2023 will not be forgotten and will influence 2024, notes Bloomberg, citing the “explosion of violence between Israel and the Palestinians” as another “catastrophe” as the world is already tired of the bloody stalemate over Russia's invasion of Ukraine. ”

It said shock waves from climate change continue to spread, with flooding in Libya killing thousands, a drought in Africa entering its third year and deadly wildfires ravaging Hawaii.

“Politically, Europe sees the rise of right-wing populism in the US, with immigration and the environment among flashpoints,” it said, citing better news as the US and China pledged greater cooperation. And the COP28 climate summit ended with an agreement committing the world for the first time to move away from fossil fuels. Worried eyes are turning to the 2024 US elections, the international news agency added.

Financial Times

According to a Financial Times survey of economists, the eurozone economy is on track for moderate growth in 2024.

“Nearly two-thirds of the 48 economists surveyed by the FT believed the single currency bloc was already in recession – usually defined as the contraction of two consecutive quarters of GDP from the previous quarter,” it noted. Most respondents predicted that the current contraction would be shallow in the first quarter of 2024 and return to moderate positive growth in the short term. However, they warned that overall 2024 will bring only weak growth and higher interest rates, potential volatility in the energy market. And geopolitical instability could cause even more problems.

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On average, economists polled by the FT forecast the Eurozone economy will grow by just 0.6% in 2024. They are more pessimistic than the European Central Bank and the IMF, which forecast economic growth of 0.8% and 1.2% respectively. .

Alliance

“2024 is expected to be a year of significant political upheaval and economic uncertainty. As countries with 60% of global GDP head to the polls, governments, businesses and households are adopting a widespread wait-and-see attitude, which could delay important economic decisions,” says House.

This increased uncertainty is most evident in countries such as China, Germany and Britain. Allianz Research warns that this uncertainty could act as a negative supply shock, pushing up prices and constraining output, investment and consumption.

Alliance mentions the phenomenon of populism. As it states, “Currently, more than a quarter of the world's countries are under populist leadership, with less than 10% of GDP per capita over a 15-year period associated with a style of government.

The situation in Europe is classified as critical. “Issues related to inflation and immigration have fueled right-wing populism and raised concerns about the composition of the upcoming European Parliament. There are fears that it will tilt toward anti-environmental and anti-immigration positions, which could block significant progress in areas such as institutional reform and energy security.

Goldman Sachs

Goldman Sachs Research expects the global economy to beat expectations in 2024, just as it did in 2023. It was based on a forecast of strong income growth by investment bank economists amid expectations of falling inflation and a strong labor market, with interest rate hikes expected. It has already dealt huge blows to the outlook for GDP growth and manufacturing recovery. Central banks, meanwhile, have room to cut interest rates if they are concerned about a sluggish economy.

World GDP is forecast to grow by 2.6% next year. The bank's economists expect US growth to once again outpace its developed market peers.

JP Morgan

The largest U.S. bank is focusing on the U.S. economy and says the effects of monetary policy will play out more broadly in 2024, with economic growth slowing as post-pandemic tailwinds fade. He estimates that real GDP growth will fall somewhere between a modest expansion and a soft landing. “After tracking better-than-expected real GDP growth of 2.8% in 2023, we forecast an expansion rate of below 0.7% in 2024,” it noted. A dollar rate hike cycle is estimated to keep the Fed on hold until mid-2024. A 25 basis point cut is forecast from June, bringing the Fed's target range to 4.00%-4.25% by the end of 2024. big Fiscal stimulus will turn to a smaller upside in 2024 than expected in the US economy in 2023, it added.

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Fitch Ratings

More technically, the international rating agency estimates that global growth remained at a good level in 2023 as consumption in China normalized and US growth recovered. The full impact of the recent monetary crisis is still being felt, with China's ongoing asset slump and the Eurozone economy stagnating, with global growth expected to slow sharply to 2.1% in 2024.

Central banks are concerned about early success in the fight against inflation and are expected to keep interest rates “under control” for some time. The central bank is expected to keep interest rates on hold until July, then cut by 100 basis points to 4.75% by the end of the year. The ECB is expected to ease in April, cutting interest rates by 75 basis points by the end of the year and setting the key refinancing rate at 3.75%. Instead, the Bank of Japan is expected to raise its key interest rate next year.

EY

By 2024, AI and sea-to-sea developments will emerge as new issues fueling geopolitical competition and driving regulatory dynamics, EY estimates.

As mentioned, “To thrive in this new era, companies will need to adapt their business models, strategies, supply chains and sustainability plans”, especially based on the dynamics of 2023 for AI, “The geopolitics of artificial intelligence will increase. Important in 2024. To reduce the chances of socio-political risks. Governments will struggle to regulate artificial intelligence, but policymakers will simultaneously try to encourage domestic AI innovation to compete in the geopolitical arena. As a result, artificial intelligence will be a central dynamic in US-China relations. In 2024, dual efforts to innovate and oversee artificial intelligence will shift to separate geopolitical blocs. Accelerate,” it noted.

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