FX.co ★ Swiss Re: global economy to expand by only 2.2%

In light of recent events, the issues of the global economy no longer seem so serious and threatening. Nevertheless, GDP growth is expected to slow, with inflation staying high.

This time, another gloomy outlook for the global economy has been presented by insurance company Swiss Re. Notably, insurers are experts in assessing risks, so this forecast deserves special attention. The Swiss analysts anticipate a continued slowdown in the world economy. Global economic output is projected to pick up by only 2.2%, but inflation is estimated to remain elevated, well above central bank targets.

"As our baseline, we expect the world economy to continue to slow gradually, growing only 2.2% in real terms next year, down from 2.5% in 2023, and 3% in 2022. At the same time, we expect inflation to remain above central bank targets through 2024," the company’s official website states.

Barring global financial and COVID-19 crises, "the tenuous growth outlook is rooted in advanced economies, where we forecast the lowest real GDP growth since the 1980s," the experts forecast, citing "the cumulative impact of the unprecedented 2021-2023 global monetary policy hiking cycle."

"Amidst these challenging conditions, we expect the insurance industry to demonstrate resilience over the next two years. Nevertheless, slow growth, elevated inflation, and the resulting uncertainty around the economic outlook will present challenges for insurers, and risks are to the downside," Swiss Re summed up.