What to expect in 2024 for the global economy? 10 trends will drive economic, political and financial dynamics next year, with risks and concerns about global stability.
2024 promises to be a crucial year for the global economy, with 10 trends to monitor carefully.
The world is facing historical challenges and is changing at an astonishing speed, whether it is the increase in armed conflicts, the redrawing of the global map of energy resources, or the rapid advances in artificial intelligence. Food for thought from Tom Standage, a journalist for The Economist, suggests that next year will be even more fraught with risks.
From the situation in the Middle East to the production of electric vehicles and geopolitical balances, nothing is as it was two years ago. The global economy must therefore prepare for a mix of unpredictable events - at least 10 - that can shock the world and make it even more vulnerable.
1. Global elections
Many nations of the world will vote to renew the highest political offices and governments. This means that a number of voters never seen before will go to the polls and reveal the current state of democracy.
In 2024, more than 70 elections will be held in countries that are home to approximately 4.2 billion people, more than half the world’s population. From the USA to Taiwan to Russia and India, some of the most influential economic and political powers will face elections that could change the world balance.
2. US elections
Among all these elections, the ones taking place in the United States are obviously the most anticipated.
The voters and the courts will give their verdict on Donald Trump, who has a one in three chance of regaining the presidency. The result promises to be crucial, with a handful of undecided states that could decide the fate of the world’s greatest power.
The consequences of the vote will be global and will affect everything from climate policy to military support for Ukraine. Indeed, with the prediction of electoral fraud in Russia, Vladimir Putin’s fate should depend more on American voters than on Russian ones.
3. Will Europe save Ukraine?
According to Tom Standage, this is a crucial dilemma for 2024.
Europe must step up and provide Ukraine with the military and economic support necessary to win the long war against Russia and in the meantime chart a path toward eventual EU membership. This is the right thing to do, especially given the risk of Trump regaining power and withdrawing support, according to the journalist.
4. Conflict in the Middle East
The attack by Hamas against Israel and the retaliation by Israel against Gaza has shocked the region and removed the idea that the world could continue to ignore the difficult situation of the Palestinians.
Will it become a larger regional conflict or will it offer a new chance for peace? Certainly, the war will make the world even more complex and threatening, with the protagonists on the international scene - the USA. China, and Europe - pressured by the need to mediate, intervene, and adapt to increasingly precarious geopolitical balances.
5. Global instability
The American plan to focus on Asia and especially on its rivalry with a rising China has been derailed by the war in Ukraine and now Gaza. Russia is also distracted by the conflict and losing influence.
The world is in the grip of general instability. The journalist underlines that the conflicts that seemed frozen are thawing and the local cold wars are heating up all over the world. Instability is growing in the Sahel. The world is preparing for more conflict now that America’s “moment of unipolar power” is over.
6. A second cold war is underway
With Chinese economic growth slowing, tensions rising over Taiwan and the US continuing to limit Chinese access to advanced technologies, the rhetoric of the “new cold war” got worse.
In this scenario of rivalry between the two blocs, Western and Eastern, Western companies seek to reduce the dependence of their supply chains on China but are finding it easier said than done. In the meantime, both sides will court the "medium powers" of the world’s South, also for their green resources.
7. The new energy geography
The transition to clean energy is creating new green superpowers and redrawing the map of energy resources.
Lithium, copper and nickel matter much more, while oil and gas, and the regions that dominate their supply, are becoming less strategic. Competition for green commodities is reshaping geopolitics and trade, creating unexpected winners and losers. Meanwhile, there is an ongoing green distrust on the part of voters who consider climate-friendly policies as a conspiracy of the elites against the population.
8. Economic uncertainty
Western economies have done better than expected in 2023, but they are not out of the woods yet, and interest rates that remain “higher for longer” will have an impact on both businesses and consumers, even if they avoid a recession.
Analysts are also keeping an eye on banks and their exposure to commercial properties, which could turn into a financial earthquake. China meanwhile is heading towards deflation, a synonym of weaker demand and the economy in general.
9. Where is Artificial Intelligence going
Companies are now adopting AI, while regulators try to dictate rules and technicians continue to improve its use.
2024, essentially, will be the year of Artificial Intelligence. The debate will intensify over the best regulatory approach and whether “existential risk” arguments are realistic.
Unexpected uses and abuses will continue to emerge, while concerns abound about the effects of AI on jobs and the potential for election interference. Its biggest real impact? Faster coding, according to Tom Standage.
10. The challenge of a more united world
The Economist journalist’s last observation is hopeful. Perhaps ideological differences will be put aside as the world enjoys the Paris Olympics, astronauts (maybe) hang out on the Moon and the men’s t20 cricket World Cup is played.
However, those hoping for some global unity are equally likely to be disappointed.
Original article published on Money.it Italy 2023-11-25 12:15:01. Original title: Economia globale, i 10 trend del 2024
