According to the survey of chief economists from both public and private sectors, 65% expect moderate growth in the region, while 35% foresee weaker growth. Inflation expectations for sub-Saharan Africa indicate that 56% anticipate moderate inflation, with 36% predicting high or very high inflation.
Concerns about geopolitical tensions are reflected in the survey's findings for the Middle East and North Africa, where growth expectations have slightly weakened. The ongoing Israel-Hamas conflict and broader uncertainties impact the region, with 61% expecting moderate or stronger growth in 2024. However, factors such as weak oil demand and a sharp contraction in tourism cloud regional prospects.
Globally, chief economists express more cautious expectations, with 56% anticipating a weakening global economy in the next year. The outlook for Europe has notably darkened, with 77% expecting weak or very weak growth. In the US, economic expectations are also weaker, with 56% foreseeing moderate or higher growth in 2024, compared to 78% in the previous survey.
Notwithstanding the global challenges, some regions remain positive. South Asia and East Asia and Pacific maintain a broadly unchanged and positive outlook, with 93% and 86% respectively expecting moderate or stronger growth. However, China stands out as an exception, facing challenges such as weak consumption and distress in property markets.
The survey underscores concerns about potential widening of geo-economic rifts due to overall global underperformance. Nearly 70% of chief economists expect an acceleration in geo-economic fragmentation, with potential repercussions such as increased volatility in the global economy and stock markets. Furthermore, 86% foresee recent geopolitical developments leading to increased localization, while 80% expect a strengthening of geo-economic blocs.
A majority (57%) anticipates an increase in inequality and the widening of the North-South divide in the next three years. The projected costs of fragmentation are expected to be notably higher for low-income economies, reaching up to 4% of global GDP, almost double that of advanced economies.
The authors of the report highlight the vulnerability of growth forecasts to heightened risks, emphasizing the escalating geopolitical rifts as potential sources of global economic volatility. The survey indicates a risk of rupturing supply chains and sending shockwaves beyond commodity markets. Additionally, uncertainties linger concerning the outcomes of election cycles in the coming year.
Despite concerns, there is a divergence of opinions among chief economists regarding the likelihood of significant disruptions to global supply chains due to geopolitical tensions. Only 36% believe potential disruptions are likely, while a third are uncertain, and another third consider them unlikely.