Blackstone Chairman, CEO, and Co-Founder Stephen Schwarzman shares his thoughts on the 2024 economic outlook, commercial real estate, capital markets activity, and the downside risks of AI.
of international monetary fund The IMF on Tuesday raised its outlook for the global economy following signs that inflation is falling faster than expected, but warned that risks remain.
In its latest World Economic Outlook, the Washington-based agency said global gross domestic product (GDP) will grow by 3.1% this year, up 0.2 percentage points from its previous forecast, and by 3.3% in 2025. We expect it to rise to .2%.
“The global economy has begun its final downhill slide towards a soft landing, with inflation steadily declining and growth sustained,” said Pierre-Olivier Grinchat, the IMF’s chief economist. “However, the pace of expansion remains slow and disruption may lie ahead.”
The latest figures suggest that us economy It is expected to grow by 2.1% this year and 1.7% in 2025.
US economy expected to ‘significantly slow’ as consumer spending loses momentum: ‘last hurray’‘
A worker delivers a package in Manhattan, New York City, December 2, 2022. (Photo by Spencer Pratt/Getty Images/Getty Images)
Still, Grincha said economic growth remains weak, especially in the face of tight US monetary policy, and resurgent geopolitical tensions in the Middle East and continued attacks in the Red Sea pose potential risks to the outlook. I warned you that there was.
Attacks by Iran-backed Houthi militants on the Red Sea and Suez Canal, key watersheds for global trade, are causing soaring shipping costs, disrupting global trade routes and fueling fears of a trade crisis. resurgence of inflation Just as price pressures within the economy finally begin to subside.
crude oil price It has risen since the beginning of the new year as the US ramps up its response to the attack.
High interest rate: ordinary deposit interest rate
Approximately 15% of the world’s shipping volume passes through the Suez Canal, including 30% of the world’s container trade. However, to avoid being attacked or having their cargo stolen, many ships sail around the Cape of Good Hope instead. African continent.
A worker polishes a weld on a safe being manufactured at Liberty Safe Company in Payson, Utah, March 22, 2022. (Photo by George Fry/Getty Images/Getty Images)
“New commodity and supply disruptions are likely, particularly in the wake of renewed geopolitical tensions in the Middle East,” Grinchas said. “Transportation costs between Asia and Europe have increased significantly as the Red Sea attacks reroute cargo around Africa. Disruptions have been limited so far, but the situation remains volatile.”
The IMF also warned that core inflation, which excludes food and energy costs, could persist more than expected and that markets could become “overly optimistic” about prospects for interest rate cuts by central banks around the world. did.
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In the U.S., investors are betting on aggressive interest rate cuts by the Chinese government. federal reserve, we are planning at least six quarter-point reductions this year. In its latest outlook, the Fed indicated it could cut interest rates three times in 2024.
“If investors reassess their views, long-term interest rates could rise, putting new pressure on governments to consolidate their finances more quickly and weighing on economic growth,” the IMF said.
