Globalisation has boosted global growth and facilitated the rise of emerging markets. Yet, the shifting global economic balance of power has increasingly led to political backlash, trade conflicts and protectionism. The COVID-19 pandemic and war in Ukraine have greatly exacerbated existing geopolitical tensions, leading to an increasing fragmentation and reorganisation of the global economy. Therefore, businesses need to adjust strategies to mitigate risks and seize new opportunities.
This year’s commodity market outlook remains highly uncertain. As consumers and businesses continue to grapple with lingering cost pressures and high interest rates, subdued global economic activity is set to translate into softer commodity demand.
In 2024, the global economy is expected to register slowing growth for the second consecutive year. This is primarily due to the dampening effect of high interest rates in most major economies globally, in addition to weakening growth in China, the world’s second largest economy. Yet, this comes after global growth consistently outperformed expectations in 2023, withstanding numerous headwinds, especially ongoing and widening geopolitical tensions.
The era of high interest rates is expected to stay for some time, as persisting price pressures and geopolitical risks continue to challenge central banks in key economies in bring inflation back to their targets. As businesses and households increasingly feel the financial pressure coming from high interest rates, they will further adjust their spending and borrowing behaviour.
Global supply chains continue to face additional pressures in 2024 due to security crisis in the Red Sea. Global shipping companies and their clients avoid trade route via Suez Canal and instead are rerouting vessels round the Cape of Good Hope. This impacts around 11% of the global trade and poses the largest threat for the Asia-Europe shipping routes.
This year's World Economic Forum Annual Meeting in Davos, Switzerland revolves around the pivotal theme of “Rebuilding Trust” amidst a period of "permacrisis" – a prolonged era marked by uncertainty, stemming from the aftermath of the COVID-19 pandemic and the war in Ukraine. Euromonitor International has identified two vital responses to today's transformed world, with a summary of key content focussing on resilience and sustainability.