The global economy is expected to strengthen or remain stable this year, with over 80% of chief economists worldwide predicting positive outcomes, as reported by the World Economic Forum. This is almost double the proportion from the previous report in 2023, indicating a significant shift towards more optimistic sentiments among economists. Over two-thirds of chief economists anticipate sustained global growth, propelled by technological advancements such as artificial intelligence and the green transition.
However, the Chief Economists’ Outlook by the WEF warns of potential challenges on the horizon, including geopolitical tensions and domestic political issues that could contribute to economic volatility. Despite the positive outlook, concerns remain about the impact of these factors on the global economic landscape. The survey conducted in April 2024 reveals a cautious optimism among economists about the future trajectory of the global economy.
While the International Monetary Fund projects a continuation of global growth at a rate of 3.2% in 2024 and 2025, this falls below the historical average. The IMF’s chief economist attributes this moderation in growth to factors such as restrictive monetary policies, reduced fiscal support, and low underlying productivity growth. However, there are signs of economic resilience, with inflation returning to target and steady growth supported by favorable supply developments.
Expectations for growth vary across different regions, with the United States and Asian economies showing strong prospects for moderate to strong growth. In contrast, the outlook for Europe remains bleak, with a majority of economists predicting weak growth for the remainder of 2024. Overall, the survey indicates a diverse range of growth expectations across regions, reflecting the complex and evolving nature of the global economy.
The report also highlights the challenges faced by businesses and policy-makers, with tensions between political and economic dynamics posing a significant challenge. Factors such as the overall health of the global economy, monetary policy, and geopolitical issues are expected to influence decision-making processes. There is a growing emphasis on the role of companies’ growth objectives in driving decision-making, highlighting the need for a balance between financial goals and environmental and social considerations.
Looking ahead, chief economists are optimistic about the long-term prospects for global growth, with a majority expecting a sustained rebound in growth over the next five years. Key factors driving growth include technological innovation, infrastructure development, and education and skills. While there is agreement on the potential benefits of these policy interventions, there is still uncertainty around the impact of environmental and industrial policies on future growth. Overall, the report underscores the need for targeted policy measures to foster inclusive, sustainable, and resilient growth in the years to come.
