A recent survey conducted ahead of the World Economic Forum's annual meeting reported that the global economy is predicted to face a year of uncertainty due to factors such as geopolitical strife, tight financing conditions and the disruptive influence of artificial intelligence (AI). The survey involved polling over 60 chief economists from both public and private sectors around the world.
The results reflected an expectation of weakened economic conditions this year by 56% of the economists surveyed, with high variation predicted depending on the region. The consensus indicated moderate to strong growth in China and the United States but foresees only weak or very weak growth in Europe. In contrast, the outlook for South Asia, East Asia and the Pacific is more optimistic, with very high majorities anticipating at least moderate growth in 2024.
Considering arguments from the world's leading central banks suggesting that interest rates have peaked, 70% of those consulted expected financial conditions to relax as inflation decreases and current tightness in labour markets eases. An interesting revelation from the study is the anticipated unequal effect of AI on the global economy. The study found that 94% expect AI to significantly boost productivity in high-income economies over the next five years, while only 53% believe the same for low-income economies.
Jason Kurtz, CEO of Basware, advised, "With businesses grappling with high-interest rates, inflation, and geopolitical tensions, it's clear that this will be a challenging year for many organisations. However, accelerating automation to streamline core processes like finance and sales should be top of the boardroom agenda to improve supply chains and deliver genuine value to the bottom line."
"It's vital that business leaders look closely at the benefits AI can have for overhauling complex manual back-office processes that could be automated, freeing up valuable staff time and reducing overheads for the long term."
Derek Mackenzie, CEO at Investigo, emphasised the implications of a tougher economic climate and advised industry leaders to focus on establishing a strong digital talent pipeline to maintain an edge on AI and cyber skills. He added, "These technologies are already having a seismic impact on the way organisations operate, transforming traditional IT functions and requiring a host of new skills to ensure companies remain compliant. Getting access to staff with the latest skills and qualifications in this area is an essential step to staying ahead of the competition."
Separately, the World Economic Forum (WEF) published a study assessing the "quality" of economic growth across 107 economies. The study surmised that most countries are growing in ways that are neither socially inclusive nor environmentally sustainable. Saadia Zahidi, Managing Director of the World Economic Forum, declared, "Reigniting global growth will be essential to addressing key challenges, yet growth alone is not enough."
In response to these findings, the WEF announced it is launching a campaign to define a new approach to growth and to assist policy-makers in harmonising it with social, environmental and other priorities.