The World Economic Forum (WEF) has revealed today that geopolitical strife and tight financing conditions will slow global economic growth, while artificial intelligence (AI) will increase inequality. The survey, which analyzed the views of over 60 chief economists from both the private and public sectors, found that more than half of the economists surveyed (56%) predict weakened global economic conditions, with differences across regions.
The majority of economists foresee moderate or stronger growth in China and the United States, weak or very weak growth in Europe, and at least moderate growth in South Asia, East Asia, and the Pacific. The survey stated that while technological advances may give new impetus to global productivity, policies that enhance good-quality growth are needed to revive global momentum and balance the impact across income groups.
The survey also found that 70% of those surveyed expect financial conditions to loosen as inflation ebbs and the current tightness in labor markets eases, despite the world’s top central banks saying that interest rates have peaked. However, AI is predicted to affect the world economy unequally, with just 53% of economists predicting a similar effect for low-income economies compared to 94% for high-income economies.
Economists Warn AI will impact global economy – WEF
The effect of AI is expected to stoke volatility in the global economy, with 87% of economists predicting this outcome. Additionally, 57% of economists expect these conditions to increase inequality and widen the North-South divide in the next three years.
The WEF also released a study on the “quality” of economic growth across 107 economies, concluding that most countries are growing in ways that are neither environmentally sustainable nor socially inclusive. The theme of AI as a driving force for the economy and society will take up a large part of the agenda at Davos this year, with about 30 separate sessions.
The survey highlights the precarious state of the global economy and the need for policies that promote sustainable and inclusive growth. The impact of AI on the economy underscores the importance of addressing the issue of inequality and ensuring that the benefits of technological advances are shared equitably.
Under the motto “Rebuilding Trust”, the 54th annual meeting of the World Economic Forum (WEF) will start on January 15, aiming to discuss “the basic principles of trust” – transparency, coherence and responsibility.