The latest consensus among chief economists points to a mixed global forecast for 2024, with inflation peaking earlier than feared and financial conditions tightening rather than loosening. In a survey conducted by the World Economic Forum, more than fifty chief economists from around the world anticipate a softer world economy this year, with Europe facing particular headwinds amid geopolitical strains and ongoing energy price volatility. The outlook remains uncertain, and the overarching question is how policymakers and markets will respond to these pressures as the year unfolds.
The World Economic Forum highlighted the current economic climate as being unstable, a sentiment echoed by the Forum’s director general. From Monday through Friday, the 19th, the Davos gathering will host over 2,800 leaders across politics, economics, business, science, and society. The aim is to discuss strategies for adapting the capitalist model to address global challenges while preserving growth and social inclusion.
In the recent survey, financial institutions and large corporates contributed their views. Banks from Europe and the Americas, including major lenders, are represented alongside global companies such as Trafigura, Google, Equinor, Adecco, Spotify, Deloitte, and Saudi Aramco. The results show that more than half of the respondents expect the global economy to weaken this year, while about 43 percent foresee little change. The majority anticipate softer labor markets and looser financial conditions in the coming year.
Despite mounting divisions, the consensus is that the world economy will face continued tests in 2024. Inflation is projected to ease, yet growth could stall as financial conditions stay tight, global tensions persist, and inequalities widen. The Forum notes that international cooperation remains critical to sustaining momentum for sustainable and inclusive growth.
The regional picture is uneven. Europe is expected to endure the most significant challenges, driven in part by the ongoing war in Ukraine, which has sent energy prices higher and fed inflation. Developments in the Middle East and North Africa also weigh on the outlook through higher energy costs and regional risk. The survey indicates that while some areas are slipping, others see resilience. In the Americas and parts of Asia, confidence varies by subregion, with Asia and the Pacific showing stronger expectations for recovery, albeit excluding China where growth dynamics differ.
Across the United States and other regions, sentiment reflects a blend of modest growth and pockets of weakness. Some markets indicate that weak consumption, softer industrial production, and housing concerns will temper the rebound, while others foresee a return to growth supported by technological adoption and productivity gains. The overall tone is cautious, with analysts watching policy responses and global supply chains for cues on the pace of improvement.
A notable theme is geoeconomic fragmentation. Chief economists anticipate a rise in fragmentation, with geopolitics injecting more volatility into markets and exchanges, and a shift toward localization. The expectation is that industrial policies will be pursued confidently but with limited cross-border coordination. Many economists believe these policies will continue to shape the path to new industries and potential growth drivers even as fiscal tensions rise and the gap between high- and low-income economies widens.
The Davos discussions also touch on the demand for greater policy experimentation. Governments are increasingly testing industrial policy tools, yet the majority expect only partial coordination across borders. There is broad agreement that innovative policy approaches could unlock fresh sources of growth and generate viable new sectors, but concerns remain about sustaining fiscal balances and managing mounting fiscal pressures.
Among the more positive notes this year is the role of artificial intelligence. About half of the economists surveyed predict that AI will become disruptive by the end of 2024, with its impact expected to be broad across sectors. AI is seen as a catalyst that could mitigate labor shortages in advanced economies while helping developing regions lift productivity and income levels. The discussion recognizes AI as a technology with rapid adoption potential, possibly accelerating gains beyond historical patterns of technological progress.
For North American audiences, the message is clear: monitoring policy shifts, energy prices, and labor market dynamics will be essential. While challenges persist, opportunities arise from smarter automation, investment in human capital, and international cooperation that supports resilient growth. The Davos agenda emphasizes turning global tensions into pathways for sustainable advancement and inclusive progress, a goal that remains central for leaders in North America as they navigate 2024 and beyond.
Cited in the World Economic Forum summary of results and subsequent reflections from Davos, the report offers a snapshot of expectations as markets adjust to a world where disruption is common, but strategic responses can shape a steadier path forward. (Source: World Economic Forum briefing on the 2023-2024 economic outlook)