The global economy in 2024: Key clues to watch out for
Al Jazeera
US interest rates, oil prices and the Chinese economy will determine the global economy next year.
The world economy has proved more resilient than most analysts anticipated at the start of 2023. In particular, global inflation has fallen without big surges in unemployment. But policymakers, desperate to engineer a “soft landing“, are not out of the woods yet.
According to the Organisation for Economic Co-operation and Development (OECD), global output, while highly fragmented, will slow in 2024 as high interest rates snuff out persistent inflation and, by extension, economic activity.
The Paris-based organisation does not anticipate growth to edge up until 2025, at which point leading central banks are expected to aggressively slash borrowing costs. Until then, global gross domestic product (GDP) is forecast to rise by 2.7 percent next year, down slightly from 2.9 percent in 2023.
The OECD’s outlook points to a long fiscal hangover from COVID-19, followed by surging energy prices after Russia invaded Ukraine. Moreover, even if monetary policy does begin to unwind next year, global interest rates will remain high by recent historical standards.
Still, economic forecasting is an inexact science. Twelve months ago, predictions of a United States recession were widespread. Elsewhere, market makers were betting that high debt costs would trigger a spate of sovereign defaults across the developing world. Neither have occurred.
