Global Economic Outlook 2024: Challenges And Opportunities For Investors

KEY POINTS
For Sub-Saharan Africa, the projection is more optimistic, with an expected rebound in growth to 3.8% in 2024, up from 2.9% in 2023.
Global Economic Trends and ProjectionsÂ
The World Bank’s Global Economic Prospects report for 2024 presents a comprehensive overview of the global economy, indicating a continued period of subdued growth.
The report forecasts a slight decrease in global economic growth, projecting a rate of 2.4% for 2024, compared to 2.6% in 2023.
Read Also: NCBA Hosts An Economic Forum, Experts Take No Prisoners On Kenyan Economy
This anticipated deceleration is attributed to several factors:
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Persistent High Global Inflation: Inflation remains a key concern, leading to tighter monetary policies which slow down economic activities.
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Subdued Global Trade and Investment: Restrictions in credit conditions and ongoing supply chain challenges, exacerbated by geopolitical unrest, particularly the Russian-Ukraine conflict and Middle Eastern tensions, contribute to a cautious investment climate.
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Declining Commodity Prices: While inflation is expected to ease to 3.7% in 2024 from 6.9% in 2023, it remains elevated due to ongoing supply chain constraints and currency depreciations.
Read Also: Kenya’s Economy In Q3: The Growth Story Sang A melody, And Agriculture Took Center Stage
Emerging Markets and Developing Economies (EMDEs)
In contrast to the global trend, EMDEs are forecasted to experience a growth increase to 3.5% in 2024, up from 3.2% in 2023. This growth is a silver lining, presenting potential opportunities for investors in these regions.
Global Economy: Shows a slight decrease in growth from 2.6% in 2023 to 2.4% in 2024.
EMDEs (Emerging Market and Developing Economies): Indicates an increase from 3.2% in 2023 to 3.5% in 2024.
Sub-Saharan Africa: Demonstrates a more significant growth from 2.9% in 2023 to 3.8% in 2024.
Sub-Saharan Africa’s Economic OutlookÂ
For Sub-Saharan Africa, the projection is more optimistic, with an expected rebound in growth to 3.8% in 2024, up from 2.9% in 2023. Key drivers for this growth include:
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Easing of Inflationary Pressures: Reduction in key import prices such as fertilizers, metals, and fuel.
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Improved Fiscal Support: Enhanced governmental support and increased domestic demand.
However, risks persist, notably the tightening of monetary policies to combat inflation and potential capital outflows due to policy hikes in developed economies like the US.
Investment ImplicationsÂ
This mixed global economic outlook suggests a cautious but opportunistic approach for investors. While global growth is slowing, areas like EMDEs and Sub-Saharan Africa offer potential growth opportunities. Investors should closely monitor inflation trends and monetary policies, considering diversification strategies to mitigate risks associated with geopolitical tensions and policy shifts in developed economies.
Read Also: How Financial Institutions Can Strengthen MSMEs To Grow Their Contribution To The Economy
About Steve Biko Wafula
Steve Biko is the CEO OF Soko Directory and the founder of Hidalgo Group of Companies. Steve is currently developing his career in law, finance, entrepreneurship and digital consultancy; and has been implementing consultancy assignments for client organizations comprising of trainings besides capacity building in entrepreneurial matters. He can be reached on: +254 20 510 1124 or Email: info@sokodirectory.com
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