The short-term outlook for the global economy is showing signs of stabilization, according to a recent report by the World Economic Forum (WEF). The latest edition of the Chief Economists Outlook, a survey conducted three times annually, gathered insights from leading economists across industries and international organizations. It found that a majority (54%) expect global economic conditions to remain unchanged over the next year. However, more economists predict a weakening of conditions (37%) rather than an improvement (9%).

"If the economy is stabilizing, it is doing so at its weakest level in decades," the report states. It points to political volatility in several countries as a potential threat in the coming years. Nonetheless, the survey highlights several positive trends, including easing inflation rates and a shift toward looser monetary policies, which could support economic growth.

Expert Perspectives on Global Economic Trends

The WEF asked six prominent economists to provide their insights into the current economic situation and the factors influencing their outlook. Here’s what they had to say:

Samy Chaar, Bank Lombard Odier, SwitzerlandChaar noted that the global economy is slowly returning to trend growth, with inflation nearing target levels in both the U.S. and the Eurozone. He highlighted the U.S. Federal Reserve's upcoming interest rate cuts, driven by a slowing labor market rather than large-scale layoffs. In Europe, growth is expected to remain modest, with Germany's manufacturing sector struggling while the service sector performs better.

Eralp Denktas, Eczacıbaşı Holding, TürkiyeDenktas emphasized the gradual recovery from supply chain disruptions and inflationary shocks triggered by the pandemic and the war in Ukraine. While inflation is moving toward target levels, he warned that uncertainties, such as high government debt and China's economic challenges, could disrupt global recovery.

Ludovic Subran, Allianz, GermanySubran focused on the impact of the upcoming U.S. elections on the global economy. He suggested that a re-election of Donald Trump could lead to inflationary pressures due to trade and immigration policies, while a Democratic win could result in fiscal consolidation and slower U.S. growth.

Paul Gruenwald, S&P Global, United StatesGruenwald predicted a soft landing for the U.S. economy, with growth slowing below 2% and the Federal Reserve gradually cutting rates. He also noted that China's economy would struggle to meet its growth targets, while Europe would experience a slow recovery.

Marieke Blom, ING Group, NetherlandsBlom predicted slow economic growth in 2024, with inflation stabilizing and interest rates nearing neutral levels in both the U.S. and Europe. She also highlighted the potential impact of generative AI on productivity, particularly in the services sector.

Srinivasa Rao Nagarjuna, Bajaj Group, IndiaNagarjuna warned that global growth, projected at 3% in 2024, will be driven mainly by emerging markets, while advanced economies face recessionary pressures. He pointed to rising food prices, trade tensions, and geopolitical conflicts as key risks to economic stability.

A Fragile Recovery with Mixed Prospects

The global economy is expected to grow slowly, with emerging markets driving most of the recovery. Advanced economies, including the U.S. and Europe, face challenges such as high debt levels, geopolitical instability, and sluggish manufacturing growth. The economists agreed that while inflation is easing, significant risks remain, making the road to recovery uncertain.

In conclusion, while there are reasons for cautious optimism, the global economy continues to face significant challenges, ranging from political instability to uneven regional growth, which could hinder long-term economic stability.