Reasons to be cheerful about the global economy

{"text":[[{"start":12.5,"text":"Happiness, according to some psychologists, is a product of reality exceeding one’s expectations. "},{"start":18.704,"text":"If so, 2023 has been quite a cheery year — at least for economists. "},{"start":23.433999999999997,"text":"Citi’s Global Economic Surprise Index shows that this year’s projections have been consistently beaten by the actual data. "},{"start":29.689,"text":"The economic trends that have underpinned this reality also offer plenty of reasons to be optimistic for 2024. "}],[{"start":36.18,"text":"First, the international economy has displayed remarkable resilience. "},{"start":40.522,"text":"Since 2020 it has endured a pandemic, war in Europe and supply chain chaos — which together triggered the highest inflation and most aggressive interest rate-raising cycle in decades. "},{"start":50.202,"text":"Yet economies have adapted better than expected, and that continued in 2023. "},{"start":54.932,"text":"In the third quarter the world’s gross domestic product was more than 9 per cent larger than pre-pandemic levels, according to Fitch Ratings’ global aggregate. "},{"start":62.762,"text":"Businesses rewired their logistics, Europe weaned itself further off Russian gas, and higher rates did not lead to a spike in unemployment. "},{"start":70.31700000000001,"text":"Such durability provides a strong foundation for the new year. "}],[{"start":74.82,"text":"Second, the scourge of inflation is fading rapidly. "},{"start":78.437,"text":"Global price growth ended last year at 8.9 per cent, and is forecast to drop to 5.1 per cent by the end of 2024. "},{"start":85.86699999999999,"text":"Food price inflation — from wheat to cooking oils — has plummeted, and the surge in energy prices is unwinding. "},{"start":92.222,"text":"The concatenation of pandemic-era supply chain shocks has also eased. "},{"start":96.439,"text":"Services inflation remains sticky, but that is down to sturdy job markets and rapid wage growth. "}],[{"start":null,"text":"

"}],[{"start":102.92999999999999,"text":"Third, fears of a “table mountain”-type monetary policy cycle — where interest rates would stay at their peak for longer — are already waning. "},{"start":110.859,"text":"The major central banks may now cut rates earlier in 2024 than anticipated. "},{"start":115.61399999999999,"text":"That would be a relief for many households and businesses. "},{"start":118.68199999999999,"text":"And although three regional US banks and Credit Suisse foundered in March, the fallout from higher rates has been contained. "},{"start":124.94899999999998,"text":"In fact, this rate cycle has usefully exposed weaknesses, from zombie businesses to poorly capitalised banks. "}],[{"start":132.01,"text":"Financial markets have boomed. "},{"start":134.177,"text":"Wall Street’s leading indices neared or surpassed record highs this month. "},{"start":138.019,"text":"Even bonds ended the year strongly. "},{"start":140.19899999999998,"text":"And, the chance of a soft landing for the US economy in 2024 — where the Fed gets inflation under control without causing a recession — has risen. "}],[{"start":149.89,"text":"Not all economies are expected to perform well. "},{"start":153.094,"text":"Economic activity has sagged in Britain and Germany. "},{"start":156.087,"text":"China’s post-pandemic recovery has also disappointed. "},{"start":159.404,"text":"But others are showing promise. "},{"start":161.22199999999998,"text":"India, Mexico and Vietnam are benefiting from shifting trade patterns, and investors are keen to boost their exposures to them next year. "},{"start":168.62699999999998,"text":"Prudent economic management also made a comeback in places. "},{"start":171.98199999999997,"text":"Greece’s government debt returned to investment grade status after a decade-long hiatus. "},{"start":176.69899999999998,"text":"In Turkey and Argentina some unorthodox approaches were reined in too. "},{"start":180.72899999999998,"text":"Central banks across many developing countries were also on the front foot in keeping inflation under control. "}],[{"start":187.23999999999998,"text":"Finally, it has been anything but the sober year for tech some had expected. "},{"start":191.65699999999998,"text":"ChatGPT became the fastest-growing app of all time, and the buzz over generative AI helped to propel the stock market. "},{"start":198.43699999999998,"text":"The adoption of generative AI by businesses in 2024 could help support productivity growth, which has shown signs of lift-off in the US this year. "},{"start":206.492,"text":"Other innovations this year also hold promise. "},{"start":209.24699999999999,"text":"The regulatory approval of weight-loss drugs — such as Novo Nordisk’s Wegovy — could help to lower healthcare burdens. "},{"start":215.83899999999997,"text":"And, Toyota’s progress on solid-state batteries may be a game-changer for the electric vehicle industry. "}],[{"start":222.17,"text":"A bit of perspective is no excuse for complacency. "},{"start":225.487,"text":"The global economy faces several battles in 2024, from pivotal elections to mounting sovereign debt. "},{"start":231.46699999999998,"text":"But, after this year’s resilient showing, there is every chance that the reality next year will also be better than expected. "}],[{"start":237.73,"text":""}]],"url":"https://creatives.ftacademy.cn/album/136122-1703854062.mp3"}