With concerns about the global financial system, the inflation crisis in the West, deflation in China, and half the world's population heading to the polls, it looks like geopolitical crisis will be on the dime in 2024.
The Economist said: “It is little wonder that analysts speak of a 'polycrisis', a 'hell picture' and a 'new world anarchy'”. “Yet, at least for now, the global economy is laughing in the face of these fears.”
The Times reports that by the beginning of 2023, “there is widespread concern that the global economy could suffer a severe recession as central banks respond to the sharp rise in interest rates by raising interest rates from record lows. It was reported that.
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The reality is very different, with global GDP growth expected to be 3% in 2023, and early signs that that growth will continue this year and into next year.
'Soft Landing'
Just this week, International Monetary Fund (IMF) Managing Director Kristalina Georgieva told the World Government Summit in Dubai that the global economy would emerge relatively unscathed from the inflation crisis and the rapidly rising interest rates that accompanied it. .
This is the so-called “soft landing that politicians, economists and policymakers have only dreamed of,” the Times said, “primarily driven by the strong expansion of U.S. GDP.”
While some countries around the world, particularly China, Germany, the United Kingdom, and Brazil, are struggling to recover from the economic setbacks brought on by the coronavirus pandemic, the United States is “There are,” said Erin Delmore, the BBC's New York correspondent. The U.S. stock market is at a record high, economic growth was 3.3% in the final quarter of 2023, and a strong labor market and falling inflation have helped the world's largest economy “lead ahead of its peers in Europe and elsewhere.'' It’s better than that.”
Delmore said they accomplished this by injecting trillions of dollars into the economy, keeping unemployment low through a flexible job market, and maintaining energy independence.
“Not aware of the chaos in the new world”
Of course, there are things that could upend this newfound optimism, including developments in the Ukraine war, attacks in the Red Sea, escalating tensions in the Middle East, a slowing Chinese economy, tensions over Taiwan, and a resurgence in global affairs. A lot. -The election of Donald Trump and the subsequent collapse of NATO.
But for now, “consensus forecasts for the global economy remain cautiously optimistic,” former IMF chief economist Kenneth Rogoff said in the Guardian.
The Economist says the world economy is “too indifferent to the new world anarchy” due in part to coordinated interest rate hikes by central banks, which have managed to bring inflation down from peaks of more than 10% globally. said. About 6% of the rich world. The newspaper said consumer confidence in the world's richest country had risen sharply from a record low in 2022, “which not only boosts households' purchasing power but also lifts their spirits.”
The Economist also said there was a “more interesting possibility” that “after so many shocking global developments, the world no longer cares about disruption as much as it once did.”
Indeed, “there is a widespread belief that the global economy is headed for a soft landing,” Rogoff concluded, but “as the world faces another tumultuous year, policymakers and analysts are increasingly convinced that the world economy is headed for a soft landing.” It must be kept in mind that there is little point in a soft landing unless you land in a seismic zone. ”
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