The global financial landscape in 2024 is marked by a mix of cautious optimism and persistent uncertainties. According to the World Economic Forum’s Chief Economists Outlook, over half of the chief economists surveyed anticipate a weakening of the global economy this year. Contributing factors include slow global economic activity, tight financial conditions, and rising geopolitical tensions, which are expected to maintain volatility throughout the year. The International Monetary Fund (IMF) projects a slight decline in global growth to 2.9% in 2024, down from 3% in 2023, with most growth driven by emerging markets, while advanced economies show tepid growth .
Geoeconomic fragmentation is a significant concern, with seven in ten economists expecting its acceleration in 2024. This fragmentation could exacerbate volatility in the global economy and financial markets. The IMF warns that increased trade restrictions could potentially reduce global economic output by up to 7%, disproportionately affecting low-income economies .
Regionally, the economic outlook varies significantly. South and East Asia are expected to maintain robust activity, with India projected to continue its strong growth driven by investment and services. However, China’s growth expectations have moderated. In contrast, Europe faces a more challenging outlook with weakened growth expectations due to economic and political uncertainties .
In South Africa, economic pressures are intense, largely due to supply-side constraints in the electricity and logistics sectors. Real GDP growth for 2024 is expected to be around 1%, significantly lower than the IMF’s 4% projection for emerging and developing economies. High inflation, high interest rates, and fiscal challenges are key issues. The South African Reserve Bank’s policy rate is currently at 8.25%, with potential rate cuts anticipated as inflation moderates into 2024 .
Overall, while some regions are poised for stable or improving economic conditions, significant risks remain. These include geopolitical tensions, financial instability, and varying regional growth dynamics, all of which contribute to a complex and uncertain global financial environment in 2024.