The Global Economic Scene in the Face of Political Changes?!
The elections that took place on the European continent in the last period produced a change that is not surprising but fundamental in the political scene, as the "extreme right" won the overwhelming majority within the European Parliament, prompting French President Emmanuel Macron to announce the dismissal of Parliament and pave the way for early parliamentary elections. This decision has affected the changes in the political scene on the reality of the French and European economies in general, and this will pose a challenge to the global economy, as the uncertainty over the elections and their political repercussions could be an obstacle to global economic growth, which will witness a slowdown in 2024, according to World Bank forecasts to reach 2.6 percent with the possibility of a moderate recession in Europe and the United Kingdom.
The World Economic Outlook shows that the economy will remain fragile in 2024, as although inflation will be lower than the previous year, it will remain high overall, still above the Fed's target of 2 percent. Global inflation is expected to reach 5.8% by 2024 with large economies not expected to reach their target of 2% inflation until 2025, while inflation is expected. Less than 3% in advanced economies. Emerging markets and developing economies are expected to experience inflation of 7.8 percent compared to 2023, at 8.5 percent. Some countries, such as Argentina, Egypt, and others, will also see inflation rates exceeding 10 percent.
Events and elections in 2024 are competing in several countries on the global stage, and the threads of political and economic change intersect to form major milestones and remarkable transformations in many countries whose effects are clearly reflected in the global economy. How will these changes cast a shadow over the global economy, and will the global character of financial markets and international trade be reshaped under these transformations?
More than two billion people in more than 70 countries will go to the polls to cast their votes in various elections. The elections of the United States, China, and India in 2024 will have a global impact. The United States is expected to experience somewhat slower economic growth than in 2023 when the growth rate was 2.6 percent. It is expected to reach 1.3 percent in 2024, approaching 1.7 percent in 2025, while inflation may reach less than 2.5 percent in 2024 after reaching 3.7 percent in 2023, according to the Federal Reserve.
With the slowdown in the growth of China, the world's second-largest economy, which is expected to fall to 4.6 percent from 5 percent in 2023, due to continued weakness in the real estate sector and weak external demand, as well as escalating tensions over Taiwan, and America continues to limit China's access to advanced technologies. The Cold War between the two sides will intensify. As for India, its economic growth is expected to reach 6.7% in 2024 after it was 6.3% for 2023, according to data from the International Monetary Fund and the Organization for Economic Cooperation and Development, and economists believe that economic growth in India is expected to remain strong, as the outlook for the Indian economy is positive and can achieve remarkable progress.
There is no doubt that the contours of the upcoming political changes open the door to many questions, such as changes in foreign trade policies, cross-border investments, and the challenges that are expected. In this regard, changes in the political environment are expected to have a negative impact on the prospects for global economic growth, especially in light of the growing trend towards retreat and regression from globalization. The populist and closed-minded trend adopted by many elected governments, especially those with a right-wing orientation, is an influential factor, especially in large countries such as the United States, India, China and Europe. Electing leaders who embrace the inward-looking trend could reduce global trade and affect growth expectations. In the face of this complex scene, the economic transformations in 2024 seem clear, especially in the subject of Chinese-American relations, as the fight against Chinese investments causes a contraction in the world, while the Gaza war and other turmoil and wars in the region will cause problems in proceeding with this trade route instead of the Silk Road, which China was trying to promote and whose idea still exists, but all these roads continue to face the challenges of stability in their passage through countries that are still facing conflicts, and this He emphasizes that 2024 is not a year when you expect open global investment policies.
In short, global economic stability may face challenges, especially in the context of geopolitical tensions and potential wars in the affected regions.
