Global economy ‘fraught with uncertainty,’ expected to slow: Davos survey

According to the World Economic Forum, the majority of economists believe economic activity will slow in 2024. Report released on Mondayciting the stresses of global conflict and long-term deflationary efforts.

“The global economic outlook remains weak and fraught with uncertainty,” the report said. “While there have been positive developments such as easing inflationary pressures and advances in the field of artificial intelligence (AI), global economic activity remains weak, financial conditions remain tight, and geopolitical rifts persist, with business and policy Planners face persistent headwinds and continued volatility.''Social tensions continue to rise. ”

In a survey of 30 top economists, 56% said they expected the global economy to weaken. Economists said Europe was the worst-performing region, with 77% saying a slowdown was likely.

Just under half, 43%, say the same about the U.S. economy, and 13% also expect domestic inflation to be higher this year.

The study paints a bleak outlook, similar to the World Bank's 2024 report released earlier this month.

The World Bank predicted that the global economy will slow for the third consecutive year in 2024, with the US economy shrinking by 1.6% from about 2.5% in 2023. The report also predicted a more difficult year for Europe.

In a World Economic Forum report on Monday, economists expressed some optimism on inflation. Few people around the world are predicting high inflation, despite positive signs that anti-deflation measures by the U.S. Federal Reserve and foreign banking systems are having an effect.

U.S. inflation fell to 3.1% last month, down from 6.4% in January last year, according to Labor Department data.

But overall, economists' sentiment was negative. Nearly 90% said global economic volatility will increase over the next three years, and 80% expect stock market volatility to increase.

The World Economic Forum said: “The results show signs of cautious optimism, including easing inflationary pressures and improving productivity through AI, but growth momentum remains weak and the pace of geoeconomic fragmentation remains largely unchanged.'' We expect this to accelerate this year.”