Page 50 - ΝΑΥΤΙΚΑ ΧΡΟΝΙΚΑ - ΟΚΤΩΒΡΙΟΣ 2024

ECONOMIC OUTLOOK

The World Economic Forum’s September 2024 These include, for instance, the gradual easing of
Chief Economists Outlook found that the majority inflation rates and a shift to looser monetary policy.
of chief economists (54%) expect the condition of “The global economy is on a normalisation path
the global economy to remain unchanged over the and is expected to return to normal growth levels
next year, while more than a third (37%) expect it through 2025, while central banks are expected
to weaken. to adjust their policy rates to neutral levels, with
The report notes there are reasons for cautious inflation in the US and the eurozone at or near their
optimism, such as an easing of inflation and evi- targets”, highlights Samy Chaar, Chief Economist
dence of the resilience of global commerce. Yet, and CIO at Bank Lombard Odier.
if the economy is stabilising, it is doing so at the Policymakers face the twin challenge of driving
weakest level in decades. higher rates of economic growth while also trying
According to Eralp Denktas, Head of Economic to influence its structural character, that is, mak-
Research at Eczacıbaşı Holding, “the global econ- ing growth less damaging to the environment, for
omy is still going through a gradual process of example, or less likely to lead to sections of society
recovery and adjustment from supply chain dis- being ‘left behind’, the report adds.
ruptions that appeared after the pandemic and the
energy price shock originally triggered by the war A brewing storm
in Ukraine, seemingly sidelined by the consider- According to the majority of chief economists sur-
able normalisation of energy prices, but leaving a veyed, public debt burdens pose a threat to mac-
more permanent scar in terms of energy security, a roeconomic stability in both advanced (53%) and
sudden rise in inflation, and a global contemporary developing (64%) economies.
monetary tightening”. The combination of increased debt levels and high
Nonetheless, the survey highlights several factors interest rates has pushed interest payments into
that bode well for the global economic outlook. financially damaging territory for many countries.
Rising debt servicing costs have led to a fiscal
What do chief economists expect for growth and inflation in 2025? squeeze; therefore, the majority of respondents
Source: World Economic Forum (2024, September) expect that in the year ahead, current debt dynam-
Chief Economists Outlook ics will undermine government efforts to boost
growth and leave countries poorly prepared for the
Country Expect moderate or Expect moderate or next economic downturn.
stronger growth lower inflation
The report warns that the problematic fiscal posi-
tion many countries find themselves in means they
United states 86% 94%
are likely to struggle to prepare for the numerous
structural changes underway, including the energy
Latin America 74% 80% transition, demographic shifts, and evolving
and the Caribbean national security needs.
The survey of chief economists points to a signifi-
Europe 53% 97% cant difference between advanced and developing
economies regarding the likelihood of an increase
in bankruptcies next year. Only 9% expect bank-
Middle East and 65% 89% ruptcies to increase in the former, but that jumps
North Africa to 39% in the latter.
The report also points out that limited fiscal space
Sub-Saharan Africa 71% 88% leaves countries ill-prepared for policy challenges as
well as future crises (59% in advanced economies
and 82% in developing economies). If debt sustain-
Central Asia 97% 96%
ability remains a significant constraint on countries’
ability to spend, they may struggle to prepare for
changes such as the energy transition, demographic
South Asia 97% 81%
changes, climate-related disasters, rapid technolog-
ical change, and evolving national security needs.
China 62% 100% The report also stresses that the next major shock
to hit the global economy could trigger a debt cri-
sis that crystallises the fiscal risks that have been
East Asia and Pacific 96% 92% building over many years. Moreover, a prolonged
fiscal squeeze will also hinder efforts to invest in a
more balanced growth agenda.

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