Monday, February 26, 2024

The main risks for the global economy in 2024

The tensions in the area cause a new risk that has re-emerged for the global economy: the energy markets, as explained by MAPFRE Economics in the report ‘Economic and sectoral panorama 2024: towards first quarter’, published by Fundación MAPFRE.

Despite the initial rise in the price of safe haven assets, such as gold and oil, the markets have strengthened again, even with signs from the Organization of the Petroleum Exporting Countries (OPEC) of new restrictions in supply. In this context, the price of oil is currently at $78 per barrel, and futures markets are pricing in the moderate to $75-70 range.

On the other hand, the price of natural gas, which has already increased by 20%, to 50 euros per megawatt/hour, does not seem to continue its rally and remains far from the peak of 2022, when it reached 292 euros. The stock of reserves and the expanded capacity to transport liquefied gas from the United States, which is not affected by the problems of maritime transit, maintain sustainable higher prices with the effects of combating long-term inflation, but without giving too much increase. like two years ago.

At a general level, the context of social volatility and bellicosity has reached, at the end of 2023, its highest level for several decades. For this reason, the geopolitical environment also represents a risk for the global economy, given the real possibility that the conflict will spread to the region and cause a crisis in the Middle East, like the one experienced in the 70s in the last century with. the battle of Yom Kippur.

The unconditional support of the United States for Israel raises doubts about the continuation of simultaneous numerical support for Ukraine, which, on the other hand, is experiencing low hours in a conflict that seems to have reached a – the stagnation. A change in the priorities of the Democratic Congress or a strengthening of the American vision will completely reduce the contribution to the cause of Ukraine, meaning that the crisis there will have a more certain and closer end of time. .

Europe is also influenced by the situation in the Sahel, not only because the coup d’état in Niger represents the 10th fall of a democratic government in favor of a junta, but because France has lost more weight – us in the region in favor of Russia and China, and the collection of materials for the atomic energy industry may be compromised.

On the other hand, the most surprising thing about 2024 is probably that it will be a global election year. In the next few months, more than 4 billion people were called to the polls. Therefore, it is a “decisive” year due to the convergence of trends, geopolitical tensions, social unrest and electoral processes in many countries that are not completely transparent.

World Nation News Desk
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