WEF – Chief Economists, Outlook 2024

The January 2024 Chief Economists Outlook by the World Economic Forum (WEF) highlights ongoing weakness in the global economy and increasing regional disparities. A majority of chief economists surveyed expect the global economy to weaken in the next year, but a significant portion foresee unchanged or stronger conditions. While there are positive developments such as easing inflation and advancements in artificial intelligence, businesses and policymakers still face challenges due to slow economic activity, tight financial conditions, and growing geopolitical rifts and social tensions. Regionally, South and East Asia are expected to have the most buoyant economic activity, while China has shifted to mostly moderate growth expectations. The US and the Middle East and North Africa have experienced weakened outlooks since the previous edition in September 2023, while Europe expects weak or very weak growth in 2024. Inflation expectations for 2024 have improved across all regions, and the majority of respondents expect labor markets and financial conditions to loosen. The outlook also focuses on two key phenomena: geopolitical developments and advancements in generative artificial intelligence. A majority of chief economists expect the acceleration of geoeconomic fragmentation, which will stoke volatility in the global economy and stock markets, increase localization, strengthen geoeconomic blocs, and potentially increase inequality and widen the North-South divide in the next three years. The resurgence in industrial policies is closely related to growing global fragmentation, with expectations of new economic growth hotspots and industries, as well as rising fiscal strains and divergence between higher- and lower-income economies.