Uncertainty Looms Over Global Economy This Year. The beginning of 2024 was greeted with two reports from the World Economic Forum and the World Bank, which conveyed the message that the current economic outlook is uncertain and has progressed at a slower pace in the last 30 years.
In The Global Risk Report 2024 19th Edition, the World Economic Forum reports that based on the Executive Opinion Survey (EOS), concerns about an economic downturn are widespread among private sector respondents, emerging as a top five risk in 102 countries, a significant increase from 2022.
The Executive Opinion Survey (EOS) from the World Economic Forum aims to identify the risks that pose the greatest threat to each country in the next two years, as identified by more than 11,000 business leaders in 113 countries.
It was reported that a lack of coherence in projections for the next two years may occur, especially regarding inflation, interest rates and growth rates. With different views, the risk of miscalibration by central banks, governments and companies can increase. This can deepen and prolong economic risks.
The short-term prospects are also considered uncertain. This is due to domestic factors in some of the largest markets in the world and geopolitical developments. Meanwhile, the continuing trade conflict and geoeconomic rift between the United States (US), European Union, China, adds significant spice to economic uncertainty in the future.
The market had indeed anticipated a reduction in interest rates in major countries in the first half of 2024. However, inflationary pressures hindered the journey to achieve this target. If price pressures persist, then central banks may hesitate to cut interest rates, potentially prolonging a period of high inflation and interest rates. Uncertainty Looms Over Global Economy This Year