According to the Chief Economists Outlook report by the World Economic Forum (WEF), over half (56 percent) of the chief economists surveyed anticipate a downturn in the global economy in 2024. This figure echoes the prediction that the International Monetary Fund (IMF) has previously released. IMF revealed that there will be a slight dip in global growth to 2.9 percent in 2024, coming from 2023’s 3 percent.
Economic outlook for 2024
In the WEF report, chief economists cited various factors driving the downturn. These include tight financial conditions, geopolitical strife, and the rapid evolution of generative artificial intelligence (GenAI).
Regionally, the economic landscape presents a varied picture. In South Asia and East Asia and Pacific, optimism is cautiously maintained. In particular, a strong majority of 93 percent and 86, respectively, expect at least moderate growth in 2024. Nonetheless, China is an exception, with only 69 percent of respondents predicting moderate growth. According to them, it will be influenced by factors such as weak consumption, lower industrial production and concerns in the real estate market.
On the contrary, Europe’s economic outlook has deteriorated significantly since the last survey. Around 77 percent of respondents now anticipate weak or very weak growth. This is nearly double the previous figure. Similarly, in the United States, the Middle East and North Africa, the economic outlook has become more subdued, with approximately six in 10 respondents forecasting moderate or stronger growth. This marks a decrease from earlier expectations of 78 percent and 79 percent, respectively.
On a more positive note, there is an uptick in growth expectations for Latin America and the Caribbean, sub-Saharan Africa and Central Asia. However, the consensus still leans towards broadly moderate growth in these regions.
Around the globe, around 43 percent of the respondents maintain a more stable or positive outlook.
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Emerging trends
A significant aspect of the WEF report about the global economy in 2024 involves the role of industrial policies in shaping economic futures.
Two-thirds of economists believe these policies will create new economic growth hotspots, though concerns about increasing fiscal pressures and a growing divide between different income economies persist.
GenAI is a pivotal driver of productivity, particularly in high-income economies. This technology significantly influences efficiency and innovation, with disparities in its benefits across income groups.
Saadia Zahidi, WEF’s managing director, encapsulated the current climate: “The latest Chief Economists Outlook highlights the precarious nature of the current economic environment.”
“Amid accelerating divergence, the global economy’s resilience 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 — highlighting the urgent need for global cooperation to build momentum for sustainable, inclusive economic growth,” she added.
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