The current year will be a very dynamic one, to say at least, and the challenges that started or continued in 2023 will transfer onto 2024, stretching farther into extremes and forcing markets to adapt, suggests an analysis by VisualCapitalist, a media outlet known for its infographics and explanatory imagery.
In January, it released its fifth annual Global Forecast Series, which checked 25 of the common predictions on the world’s economy, markets, geopolitics, and technology with reputed experts in these areas. The goal was to find whether there’s a consensus among on predictions of global significance.
A statement by VisualCapitalist says the topics have been drawn from a database of over forecasts and predictions compiled from reports, podcasts, interviews, and more, and the analysis offers an overview of the most cited trends and opportunities that experts are watching for the rest of the year.
News-Café.eu selected the most relevant conclusions from this report.
On Economy and Markets
Inflation: Following a consistent decline in inflation across global economies in 2023, many analysts anticipate a continued cooling-off trend towards target levels. While some acknowledge that reaching these targets may pose challenges, few predict a resurgence of inflation similar to the 2022 scenario.
Interest Rates: With the expectation of inflation being subdued in 2024, major banks and institutions project interest rate cuts by the Federal Reserve, European Central Bank, and Bank of England by the middle of the year. Analysts' forecasts on the extent of rate cuts vary between three and six cuts, while Federal Reserve board members themselves anticipate two to three cuts.
Markets: Anticipating interest rate cuts, experts cautiously provide positive forecasts for both stocks and bonds in 2024. Falling rates are likely to result in lower bond yields, while equities are expected to continue benefiting from the growing AI theme.
The 2024 investment playbook emphasizes portfolio diversification, particularly in the face of looming geopolitical risks.
Real GDP Growth: The global outlook for economic growth appears subdued, with forecasts ranging from 2.5% to 3%, slightly below the 10-year average in 2013 through 2022 of 3.1%. The United States is expected to experience a slowdown, with the IMF forecasting a decrease from 2.4% in 2023 to 1.5% in 2024. Europe is also projected to continue facing sluggish growth at 0.9% in 2024.
Many experts predict that India will outpace China in terms of real GDP growth, thanks to its focus on infrastructure and foreign investment as China struggles to control unemployment and spends on aircraft carriers.
On Geopolitics and Security
The interviewed experts foresee no imminent easing of global tensions as Russia continues its war in Ukraine and Israel gets drawn in the conflict with Hamas and other radical militant groups. On the contrary, many highlight the likelihood of additional geopolitical flare-ups and escalating risks as a primary concern for 2024, emphasizing the need for diversified and agile positioning.
Ongoing attacks by Yemen's Houthi terrorists on container ships in the Red Sea have led to disruptions in marine shipping. Anticipated retaliatory strikes from the U.S. further solidify the potential for sustained disruptions in global maritime transportation.
Prospects for resolving the Russia-Ukraine and Israel-Hamas conflicts remain uncertain, with few experts predicting definitive resolutions in 2024. Instead, most experts anticipate further escalation and increased involvement of other countries as more likely scenarios.
Expert opinions are deeply split over the possibility of a China attack on Taiwan, and Beijing carries on its military buildup in the South China Sea.
Adding to these persistent geopolitical challenges, 2024 is a pivotal year for elections worldwide. With countries like the U.S., Russia, Ukraine, India, Mexico, and many others holding elections, the geopolitical landscape is characterized by limited stability, leaving room for potential seismic shifts this year.
Regulation or loss of control over artificial intelligence
2024 is an explosive year for AI, which continued evolving both positively and negatively.
“While advances in the technology are inevitable, the less exciting reality of regulation and legal disputes around training data is already a key issue, as seen in the New York Times’ lawsuit against OpenAI. Along with this, the growing potential for malicious AI use around the many global elections this year could spur further calls for greater regulation,” the analysis reads.
Experts foresee more AI products and their faster adoption by governments, businesses, and individuals. AI is both about opportunities and risks – from higher economic productivity and unprecedented scientific breakthroughs to mass unemployment and powerful security threats.
Many expect the European Union to act faster and tougher to regulate the AI sector and the U.S. enterprising weaker efforts in this direction. Yet, ordinary people in most societies will be caught unprepared for AI rise.
According to the consensus opinion, AI’s next wave is text-to-video tools and integration into Apple products, plus an avalanche of lawsuits against AI companies and election-related scandals.
Everything is connected
“While the global economy, markets, geopolitics, and technological advancements have always affected each other in various ways, in 2024 these connections feel stronger than ever,” according to the report, which gives as an example the escalating conflicts in the Middle East, affecting shipping insurance costs and routes, driving up inflation again and keeping high interest rates.
In 2024, the world will be more polarized and geopolitically fractured, but economies will not stay passive – they will adapt to these changes.
Whether Donald Trump is perceived as the winner of the U.S. presidential elections or Vladimir Putin is believed to keep the power in Russia remain beyond News-Cafe.eu's sight as we can't afford buying the while report.
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