Unpredictable year ahead for world economy amid geopolitical strife, economic turmoil

The global economy faces a year of subdued growth prospects and uncertainty stemming from geopolitical strife, tight financing conditions and the disruptive impact of artificial intelligence, a survey of top economists released on Monday found.

Conducted each year ahead of the World Economic Forum’s (WEF) annual meeting in the Swiss resort of Davos, the survey of 60-plus chief economists drawn globally from the private and public sectors attempts to sketch priorities for policymakers and business leaders.

Some 56 percent of those surveyed expect overall global economic conditions to weaken this year, with a high degree of regional divergence. While majorities saw moderate or stronger growth in China and the United States, there was broad consensus that Europe would muster only weak or very weak growth.

The outlook for South Asia and East Asia and Pacific was more positive, with very high majorities expecting at least moderate growth in 2024.

Reflecting commentary from the world’s top central banks suggesting that interest rates have peaked, a full 70 percent of those surveyed nonetheless expected financial conditions to loosen as inflation ebbs and current tightness in labor markets eases.

Artificial intelligence was seen making an unequal mark on the world economy: while 94 percent expected AI to significantly boost productivity in high-income economies over the next five years, just 53 percentt predicted the same for low-income economies.

Separately, the WEF released a study on the “quality” of economic growth across 107 economies that concluded that most countries are growing in ways that are neither environmentally sustainable nor socially inclusive.

“Reigniting global growth will be essential to addressing key challenges, yet growth alone is not enough,” said Saadia Zahidi, Managing Director, World Economic Forum.

The WEF said it was launching a campaign to define a new approach to growth and help policy-makers balance it with social, environmental and other priorities.