New York, Tuesday, October 22, 2024-The global economy is entering the year-end with unexpected optimism as slowing inflation raises hopes for a soft landing.
However, significant political hurdles loom on the horizon, particularly as the US presidential election approaches, which may lead to starkly different economic outcomes.
Finance ministers and central bank leaders are convening in Washington this week for the International Monetary Fund (IMF) and World Bank annual meetings starting Friday, October 25, amid rising concerns about soaring government debt and geopolitical tensions in the Middle East, Ukraine, and the Taiwan Strait.
While the OECD reports that unemployment in advanced economies remains stable, Bloomberg Economics forecasts global GDP growth at 3% for this year, slightly lower than 2023’s 3.3%.
US consumer spending remains strong, yet demand is softening across Europe. Chinese policymakers are implementing stimulus measures to support their struggling property sector, aiming to achieve a growth target of around 5%.
As the specter of a potential trade war looms, the IMF estimates global public debt could reach $100 trillion, complicating future economic responses.
With the US Treasury reporting a 28-year high in debt interest costs, experts express concern over limited fiscal flexibility in the event of an economic downturn.
ECB voiced skepticism about achieving a soft landing amid current geopolitical tensions, stating, that there would be shocks.
