5 major risks confronting the global economy in 2024

Overview:

This article by Indermit Gill and M. Ayhan Kose examines the 2024 global economic outlook.

• Despite recent resilience, the global economy faces significant risks, including geopolitical tensions and climate change.
• The interconnected nature of these risks could lead to widespread economic challenges.

Key Quotes:

1. "Geopolitical tensions have become the single most important risk confronting the global economy."
2. "Climate change is increasing the frequency and cost of natural disasters, impacting economic growth and poverty."

What They Discuss:

• The impact of geopolitical tensions on global resources, particularly in Eastern Europe and the Middle East.
• China's economic slowdown and its global trade implications.
• Financial stress in developing economies due to global interest rate changes.
• The shift towards more restrictive trade policies and its effects.
• Immediate and long-term impacts of climate change on global trade and economy.​

What They Recommend:

• Stay prepared for potential escalations in geopolitical conflicts.
• Closely monitor China's economic performance.
• Support developing economies vulnerable to financial stress.
• Balance trade policies to support global trade, especially for developing economies.
• Proactively address climate change to mitigate its economic impacts.

Key Takeaways:

• The global economy is at a crossroads, facing risks from geopolitical tensions, economic shifts, and climate change.
• These risks are interlinked and could have compounding effects.
• Developing economies need particular attention and support.
• A balanced approach to trade and proactive climate action are essential for long-term stability.

This is a brief overview of Indermit Gill and M. Ayhan Kose's work from Brookings. For a complete understanding, we recommend reading the full article.