Davos: geopolitical risk anxiety overshadows global economic resilience
Kyiv • UNN
The resilience of the global economy has surpassed all forecasts, but discussions at the World Economic Forum are focused on wars: Russia vs. Ukraine, Israel vs. Hamas, the conflict in the Red Sea, and other possible threats.
The growing conflict in the Middle East, Russia's ongoing aggression against Ukraine, and a host of other potential geopolitical flare-ups are casting a fog of uncertainty over the world's economic growth prospects.
This is written by the Financial Times and reports UNN.
Details
The economic backdrop of the Davos meetings is much more promising than many expected a year ago, the publication writes. It is noted that the revival in financial markets, overcoming high inflation at the end of 2023, and possible prospects for economic growth.
The resilience of not only economies, but also financial markets to the current geopolitical crises, to rising interest rates and the fight against inflation has been extremely strong
But even as leading economies try to assure us that the wave of economic troubles of the past few years can be successfully overcome, this optimism is significantly tempered by growing anxiety about the many geopolitical risks that will create a fog of uncertainty in 2024.
Ukraine continues to fight Russian aggression: the Russian-Ukrainian war remains the main topic for many. President Volodymyr Zelenskyy warned delegates that Russia's Vladimir Putin has aggressive ambitions that go beyond Ukraine.
The wars in the Middle East are ongoing, with the possibility of escalation in the Gaza Strip and the Red Sea being actively discussed. The latter conflict has led to a massive diversion of shipping around southern Africa, higher corporate costs and potential inflation.
European Commission President Ursula von der Leyen said that the world has entered an era of "conflict and confrontation, fragmentation and fear.
Without a doubt, we are facing the greatest risk to the global order in the post-war era
According to Bit Simon, commercial director of logistics at DP World, one of the largest container terminal operators, the topic [of geopolitical disruption] is really getting complicated. He warned that rising shipping costs, combined with potentially higher oil prices, could exacerbate inflation.
At the same time, eight of the world's 10 most populous countries are holding elections this year, which will mark a period of acute political instability.
At the same time, there is a continuing shift away from the long postwar period of ever-increasing globalization, as countries prioritize national security and resilience over economic efficiency, and traditional methods of cooperation are breaking down.
A survey of 30 leading economists conducted by the World Economic Forum ahead of the meetings showed that almost 70 percent fear that the pace of geo-economic fragmentation will accelerate this year.
Addendum
The above warnings are in addition to the results of a Goldman survey cited by Bloomberg . About 54% of respondents chose geopolitics as the top risk, according to the survey, conducted as part of the bank's annual global strategy conference, which took place this month in London. The second place was taken by the US elections to be held on November 5, with 17%.
The survey results show a significant shift in global market sentiment as inflation, a major concern in recent years, slows and returns to central bank targets. Although a resurgence in inflation is still a threat, the Goldman survey shows that investors are increasingly concerned about how to position themselves in the event of a proliferation of wars in Europe and the Middle East, as well as rising tensions between China and Taiwan.
Recall
UNN reported that according to the conclusion of the Ministry of Economy, even despite the blocking of Polish carriers at the border, Ukraine's economy continues to grow.
It also became known that China's economy grew by about 5.2% in 2023, which is slightly better than the official target.
