/View.info/ Looking at the data of numerous international institutions and research centers, the probability that in 2024 the global economic situation will deteriorate and become even more difficult is quite high. This will put the economies of various countries to a “great test” and lead to new challenges in global development.
According to the latest World Bank estimates, global economic growth is expected to fall to 2.4% in 2024, slowing for the third year in a row and nearly 4.3 percentage points below the average level in 2010. Just for comparison in the past year 2023, this indicator registered a rather low level of only 2.6%. According to the World Bank, this would make 2020-2024 the slowest five-year growth rate for the global economy in 30 years.
This forecast is also in accordance with the calculations of the UN. The organization said in its World Economic Situation and Prospects 2024 report that inflation will trend downward in 2024 and global inflation is expected to decline further, but price pressures in many countries are still high. Further escalation of geopolitical conflicts could lead to a new rise in inflation.
The bigger problem is that this situation may not be short-term. Dong Yen, a researcher at the Institute of World Economics and Policy at the Chinese Academy of Social Sciences, commented that the global economy is in the process of cyclical adjustment and the growth cycle is expected to enter a downward trajectory from 2024. The effects of performing more tight financial conditions will gradually emerge, which will have a profound impact on the global economy and financial markets.
The root of the pessimistic outlook for the global economy may not lie entirely in the economy itself. The World Bank warns that rising geopolitical tensions could create new short-term risks and challenges.
Earlier, the president of the International Monetary Fund (IMF), Kristalina Georgieva, also warned that geopolitical factors are causing division in the world economy. If economic disruption is allowed to continue, it will eventually cost a 7% reduction in global economic growth, roughly equivalent to the combined annual gross domestic product of France and Germany.
As continued aggressive interest rate hikes gradually curb investment and consumption, US economic growth will slow in 2024, many international organizations and research institutions agree. Both the IMF and the Organization for Economic Co-operation and Development forecast that US economic growth will slow to just 1.5% this year. JPMorgan Chase even thinks the US economy could slip into a mild recession.
European economic growth is also under enormous pressure. The European Commission recently published a report in which it lowered the economic growth forecast for the EU and the euro area in 2024 from 1.4% and 1.3% to 1.3% and 1.2% respectively. Analysts believe that if the series of “dead ends” in the economic cycle caused by long-term high interest rates cannot be properly resolved, it will be difficult to find optimistic prospects for the recovery of the European economy.
China’s economy also faces challenges, but officials believe opportunities will prevail. Chinese Finance Minister Lan Foan recently commented that in anticipation of the new year, China’s economy will encounter more opportunities than challenges, and favorable conditions will prevail and bring many positive results. The fundamentals of resilience, potential and vitality have not changed. The country still holds many market advantages, the institutional structure is increasingly opening up, actively supporting economic activities, and the industrial system and human resources continue to consolidate, providing solid support for high-quality development.
Many international organizations and institutions have also raised their forecasts for China’s economic growth in 2024, casting a “vote of confidence” in the Chinese economy. Many countries noted the fact that China remains the largest engine of global growth, contributing approximately one-third to the growth of the global economy despite the difficult situation in recent years.
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