Kavan Choksi Business Consultant Marks Some of The Key Global Economy Trends to Watch Out In 2024 

The world economy proved to be more resilient than many analysts had expected at the start of 2023. The global inflation has especially gone down without causing a significant rise in unemployment. However, policymakers trying hard to engineer a “soft landing“ are not out of the woods yet. As Kavan Choksi Business Consultant says, the global output, while being extremely fragmented, is likely to slow in 2024 as high interest rates snuff out persistent inflation, which can reduce economic activities.

Kavan Choksi Business Consultant underlines certain global economy trends expected in 2024

The global economic outlook for 2024 is marked by a further slowdown in real GDP growth, with expectations set at about 2.7%. Depleting savings and higher-for-longer interest rates would lower business investment and slow consumer spending. This would soften the services sector and the labour markets as well, which are key pillars of previously resilient growth.

Major economies, including the Eurozone, the United States and China, would face diverse range of challenges that are likely to keep their growth subdued. On the upside, however, the Asia Pacific region is likely to remain the primary source of global growth. Accelerating momentum is expected in many economies in the region, including Indonesia, Vietnam and India.  Expected noticeable moderation of inflation globally in 2024 is another positive factor. Amidst this, however, the global economy does continue to experience unusually high level of uncertainties, as well as opportunities and risks owning to varied transformative developments. These developments range from the reset of globalisation and technological advancements like artificial intelligence, to rising geopolitical tensions and conflict.

In addition to having a stagnant economic growth environment, in 2024, global businesses are likely to continue to face elevated cost of capital and labour market shortages in most advanced economies.  Even though abating inflation and weakened economic activity have led to softened growth in job vacancies and wages since late 2023, labour supply still remains somewhat tight due to the aging population ageing and high demand for labour-intensive services.

As Kavan Choksi Business Consultant points out, even though interest rate hikes might have peaked in 2023, borrowing are expected to stay elevated throughout 2024. This is likely to create a brand new financial landscape for businesses and consumers alike. The persistence of high interest rates would impede business investment by limiting access to finance, and may even increase the cost of servicing existing debts. Hence, in 2024, businesses should try to prioritize attracting and retaining talent, as well as put emphasis on improving productivity and implementing cost-effective management strategies to safeguard their financial health.

The global manufacturing sector is expected to show slower growth of 2.1% in real terms in 2024, down from 2.6% in 2023. Slower global economic growth along with stalling demand for B2B goods is likely to drag down the performance of the manufacturing sector. Manufacturers are likely to continue to face labour market problems, along with potential trade restrictions and stricter environmental regulations that will add to the slower growth. Reshoring of manufacturing operations, however, would provide new growth opportunities in 2024, particularly in developed economies.