Publications
May 23, 2024
Basque Trade & Investment Internationalization Competitive intelligence
Estimates of global economic growth in 2024, established at 2.4%, remain practically unchanged compared to those made in 2023, which placed it at 2.5%. This is the forecast included in the latest edition of the International Observatory of Basque Trade & Investment (BasqueTrade), the agency for the internationalization of Basque companies integrated into the SPRI Group, which analyzes the situation of the global economy, as well as trends of economic growth and geopolitical development in different regions of the world.
In this context, annual economic growth of close to 2.7% is anticipated in the period 2025-2028, driven by the flexibility of monetary policies, investment in technology and the energy transition.
Starting in mid-2024, inflation is expected to begin to decline and interest rates to stabilize as a general global trend. Although high interest rates and geopolitical competition remain obstacles to growth, the risks of a recession have diminished. Supply will normalize and demand will weaken, helping to reduce inflation in developed economies.
In addition to global estimates, regional forecasts have also been made. Thus, in North America, electoral uncertainty will mark, together with the still high interest rates, the economies of the subcontinent, with elections in 2024 in the US and Mexico that may affect their economic performance.
In Latin America, democratic backsliding and social unrest continue to be important risks that could negatively impact the economy in 2024. These internal tensions together with the impact of external factors such as “El Niño” endanger the stability and economic growth of the region .
In Asia, the escalation of tension between China and the United States is noticeable, with an increase in investments in strategic industries and the increase in protectionist policies. At an economic level, expectations are positive, with stability extending to the oceanic zone, particularly in Australia.
Political tensions mark the current situation in Africa and especially the Middle East, posing significant economic and foreign policy risks. In Europe, for its part, the political climate remains tense and polarized, with the rise of far-right parties. Ecological transition policies and increased defense spending are priorities on the regional agenda.
Relevant international events
Added to these factors are international events that influence the economic ecosystem, such as the Red Sea crisis, where the Houthis, close to Hamas, are carrying out attacks against vessels that transit this maritime route, significantly affecting maritime transport. This especially impacts the energy industry due to interruptions in the transportation of oil and liquefied natural gas, and highly globalized industries such as the automotive industry, which faces specific production stops due to logistical blockades and interruptions in global supply chains. The food industry is also affected, since the increase in transportation days makes the supply of perishable products difficult.
Another factor to monitor is the presidential elections in the United States, scheduled for next November, in which the current Democratic president Joe Biden and the former Republican president Donald Trump will compete. Despite their differences, both candidates agree on the importance of supply chain security, trade protectionism and defense. The primary goal of either administration will be to overtake China in terms of competitiveness and rebuild US industrial capacity. Congress is expected to remain closely divided, with fragile majorities that will limit the scope of legislative action, especially regarding tax reform, public spending and investment.
