Muhammad Karkouti All expectations coming from international institutions at the beginning of this year were bleak about the global economy, and an atmosphere of lack of optimism is still present on the scene in one way or another, as a result of the pressures to which this economy is exposed, and other causes, whether those related to trade battles, the war currently taking place in Ukraine, the rise in food and energy prices, and the disruption of supply chains. In addition to the repercussions left by the Corona pandemic on the international economic arena in general, which will not disappear for several years to come. In fact, last year was one of the most difficult years for the global economy, and Kristalina Georgieva, head of the IMF, believes that the current year will be more difficult despite some positive indicators that have appeared in the past short period. There is no doubt that the decline in the activity of major economies contributes directly to the difficulties in general, especially if expectations are true that nearly a third of the global economy will enter a recession at the end of this year. However, modest indicators emerge on the scene regarding growth, as it is believed that this economy will achieve growth this year of up to 2.3 percent, an increase of 0.4 percent over the expectations launched late last year. What is noteworthy is that this percentage is lower than the growth rate in 2024, which is expected to reach 2.5 percent, according to a recent report issued by the United Nations. In any case, the level of growth for this year and next remains lower than its level in the two decades prior to the outbreak of the Corona pandemic, during which growth reached 3.1 percent. There is no doubt that this pandemic has greatly affected the global economy, not in the arenas of developing countries or those described as the poorest, but rather in the arenas of developed countries, where poverty levels have risen even in the middle classes. In addition to the “forced” spending of governments in order to confront the losses resulting from Corona, whether in terms of business or individuals’ living lives. Despite the disparity in expectations between the International Organization and the International Monetary Fund, the differences seem small, especially since the latter has begun to adjust its expectations downward rather than upward, in line in one way or another with the expectations of the World Bank, even if the latter raised its expectations very modestly, due to the “flexibility” shown by the American economy and other major advanced economies. This point is very important, if we take into account that the largest economy in the world has managed, “at least so far,” to remain outside the scope of recession, even if it witnessed a significant slowdown in the past few months. But the matter remains more closely related to the pace of growth of the Chinese economy, which is a traditional engine of global growth as a whole, along with India. Expectations are almost unanimous that the United States will record growth of 1.1 percent this year, up from 0.4 percent, and that the European economy, which suffers from the "horror" of inflation and high interest rates, will achieve growth at 0.9 percent, up from 0.2 percent. However, growth in China will be around 5.3 percent by the end of this year. The recent growth is not guaranteed, according to several indicators issued by Beijing, as well as the prospects for the second largest economy in the world. In any case, the global economy will be in a somewhat acceptable position if it achieves growth this year within the expected limits of 2.3 percent, which means that the difficulties that national economies are going through will witness some decline in the next few months, even though the dangers of the inflationary wave are still present on the scene. Perhaps the “flexibility” that is referred to from time to time in advanced economies can contribute to stabilizing this level of growth, especially since there is currently talk among the relevant institutions of the United Nations about an increase in the real global GDP to 2.1 percent, while expectations at the beginning of this year indicated 1.7 percent. Regardless of the factors that help achieve growth, eyes remain focused on the performance of the Chinese economy in the remaining months of this year. Realistic indicators currently indicate that growth in this economy will not exceed 5 percent at best, while China has enjoyed almost constant growth over the years, amounting to 7 percent. The problem also remains present in the arena of less developed economies, which have suffered greatly from the negative effects that occurred in the past three years. Its growth will not exceed 4.1 percent this year, and 5.2 percent next year, and these percentages are much lower than the targeted growth of 7 percent. In any case, the situation of the global economy will remain turbulent for a period that will not be short, specifically until the current inflationary wave subsides, and until government debts are controlled, which in some countries have reached much higher than the size of their gross domestic product. Source: Al-Eqtisadiah
