Kavan Choksi Wealth Advisor Provides an Overview On The World Economic Situation and Prospects for 2024

Trends in the global economy impact almost everything. In fact, arguably almost every other trend relies on the global economic conditions. As Kavan Choksi Wealth Advisor mentions, in a downturn, retailers struggle, consumer confidence wanes, and businesses are forced to deal with uncertainty. On the other hand, in times of growth, critical infrastructure and innovation can be built out. Keeping an eye on the global economy is important as due to the interconnectedness of today’s world, the economic events in one region can have far-reaching consequences globally.

Kavan Choksi Wealth Advisor talks about world economic situation and prospects for 2024

Global economic growth did outperform expectations in the year of 2023, with many large economies showing a high level of resilience. However, the growing intensity and frequency of extreme weather events, as well as simmering geopolitical tensions have increased underlying risks and vulnerabilities. Moreover, tight financial conditions also pose a high risk to global industrial production and trade.

Key elements of global economic prospects for 2024 would include:

  • Global GDP growth: Global GDP is estimated to go up from 2.7% in 2023 to 2.4% in 2024, indicating a continuation of sluggish growth trends. Developing nations are especially struggling to recover from pandemic induced losses, and many of them are dealing with high debt and investment shortfalls.
  • Regional disparities: The largest economy on the planet, the United States, is likely to witness a drop in GDP growth from 2.5% in 2023 to 1.4% in 2024. Consumer spending, which is an important driver of the economy, may weaken due to diverse factors, like a softening labour market and high interest rates. On the other hand, China is projected to experience a moderate slowdown amid domestic and international headwinds. Japan and Europe may also experience major economic headwinds, with growth rates forecasted at 1.2% for both regions in 2024. A divergent picture can be seen in developing nations, with Africa’s growth projected to slightly increase from 3.3% in 2023 to 3.5% in 2024. While the least developed countries (LDCs) are projected to grow by 5.0% in 2024, this falls short of the 7.0% growth target set in the Sustainable Development Goals (SDGs). Limited fiscal space and high debt remain a huge concern for such countries.
  • Labour market: Post pandemic, conflicting trends have been seen between developed and developing countries in the global labour market. A robust recovery is experienced by most developed nations with low unemployment, along with rising nominal wages and narrowing wage inequality. In contrast, developing nations show mixed progress. While countries like Brazil and Russia do report declining unemployment, concerns like gaps and high youth unemployment persist.

In addition to the trends underlined above, Kavan Choksi Wealth Advisor also points out that global inflation, which was a major concern over the past two years, is showing signs of easing. Global headline inflation went down from 8.1% in 2022 to an estimated 5.7% in 2023. It additionally is projected to decline to 3.9% in 2024. However, food price inflation does remain a critical concern, as may exacerbate food insecurity and poverty, particularly in developing nations.

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