There are a slew of indicators signaling a downturn in the global economy. While analysts expect more or less decent growth this year, the next one will likely be marked by a slowdown amid high inflation and monetary policy tightening by major central banks.
Autumn is the right time to begin taking stock of the year. Most of 2023 is behind us, which makes it possible to publish forecasts for the year-end and the start of the next year. According to Financial Times analysts, the global economy will grow by 2.4% in 2023 but contract to 2.1% in 2024. A similar view is shared by economists at Consensus Economics. Their grim economic outlook stems from persistently higher interest rates in major economies. In addition, economists anticipate unexpectedly strong consumer demand, which could flatten global economic growth.
Another constraint to economic expansion will be high consumer prices. Inflation is likely to remain well above central bank targets for a long time to come, which in turn could force leading regulators to keep borrowing costs elevated well into next year.
"Some of the weakness [anticipated for this year] is being pushed in to 2024," Nathan Sheets, chief economist at US bank Citi, summed up.
Earlier, Marie Diron, managing director for global sovereign and sub-sovereign risk at Moody's Investors Service, listed the main risks to the world economy. According to her, high inflation, rising interest rates, and China’s slow economic recovery after prolonged lockdowns are the key headwinds for the global economy.