Bloomberg: This is how the world economy looks like in 2024


A Bloomberg report reveals the general outlook on the global economy in recent days, as the report discusses the main developments shaping the global economic landscape.

From Germany’s struggle against deindustrialization to optimistic growth forecasts in the United States and Japan’s ambitious chip initiative, each region faces unique challenges and opportunities.

The report also discusses the impact of geopolitical tensions, oil price volatility, and central bank decisions on the global scene.

The report also discusses the economic obstacles facing Europe, the unprecedented budget surplus in the United Kingdom and the thriving manufacturing sector in the United States, in addition to the repercussions of oil price fluctuations on the revenues of the Kingdom of Saudi Arabia.

The report delves into the complexities of the digital economy, where the global consensus faces unprecedented challenges.

A Bloomberg report said that Germany, the number one economic power in Europe, is struggling to recover slowly from the slowdown in the industrial sector, with the government estimating growth of only 0.2% this year, which is much lower than previous expectations of 1.3%.

The German Chancellor Olaf Scholz’s government attributes the challenges to geopolitical tensions and high interest rates, while expressing optimism about the impact of rising real wages and a strong labor market in 2024.

However, Bloomberg notes that private sector activity in the euro zone paints a mixed picture, with services across the continent rising to their highest level in 8 months last February, to compensate for the turbulent state in which the German manufacturing sector is experiencing.

The factory index in Germany fell to its lowest level since last October, revealing a decline in production along with a decline in new orders at home and abroad.

In the United Kingdom, the historic budget surplus last January raised expectations for tax cuts in the next budget announcement on March 6, by Chancellor of the Exchequer Jeremy Hunt.

The surplus – the largest ever – could play a pivotal role in shaping economic policies, ahead of possible general elections later this year.

Bloomberg’s report is optimistic about the expected brightness of the economic prospects in the United States for the year 2024, with economists on Wall Street raising their expectations for growth and spending.

The latest Bloomberg poll indicates an expected expansion of 2.1% at an annual rate this year, compared to the 1.5% expected just last month.

This optimism is fueled by added strength to the labor market, consumer spending, and government expenditures.

Bloomberg indicates that manufacturing activity in the United States expanded at the fastest pace since September 2022, freed from the recession that was looming in its sky.

The growth, although modest, represents consecutive months of improvement, which indicates a positive trend in this sector.

As for Japan, its facing challenges in the global chip market with its share falling below 10%, is making a major investment in Hokkaido to revive its chip-making prowess, according to a Bloomberg report.

The move aims to insulate the Japanese economy from growing tensions between the United States and China over access to chipmaking expertise and equipment.

Bloomberg notes that Saudi Arabia – which relies heavily on oil revenues – saw a significant decline in crude oil exports last year, with oil prices averaging around $80 per barrel.

The decline in oil export revenues by about $80 billion pushed the Kingdom’s budget into deficit again, according to the report, which indicates the importance of the Saudi economy remaining strong in the face of fluctuations in energy prices.

Central banks around the world have largely kept borrowing costs unchanged in the first months of 2024.

Indonesia’s central bank remains on a long hiatus to support its weak currency, while Türkiye’s central bank, under new leadership, has shifted to a more hawkish stance, while a country like Paraguay chose to lower interest rates in this period.

Bloomberg notes that the decades-long global consensus on e-commerce and the flow of data across borders is at risk of collapse, noting that concerns about the dominance of major technology companies based in the United States, along with other concerns; Such as: the risks of artificial intelligence, the protection of data privacy, and the potential loss of customs revenues, prompting emerging economies to re-evaluate the current framework.

As the global economy navigates through these challenges, the resilience and strategies of individual countries will play an active role in determining the path to recovery.

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