India's economic outlook has become "more uncertain" due to the ongoing escalation and geopolitical tensions in West Asia, which have resulted in substantial energy disruption and logistical headwinds, the Finance Ministry's monthly economic review for March 2026 noted.&nbsp;"The economic outlook has become more uncertain in the wake of recent geopolitical developments in West Asia, which have disrupted key energy and logistics channels and led to a tightening of global supply conditions," the report said.&nbsp;The Department of Economic Affairs pointed out that India's economic prospects remained "robust" until February 2026, supported by strong demand and industrial activity.&nbsp;"Prior to the onset of these developments, economic activity in India remained robust up to February 2026, with strong performance across both supply and demand-side indicators," the report added.&nbsp;It highlighted that the conflict in West Asia has sparked fears of a dip in global growth and a surge in inflation due to disruptions in the Strait of Hormuz, through which 20 per cent of global oil transits.&nbsp;The review said ship transits through the strait have nearly come to a halt, dropping to “one a week, as against 200–300 a week,” significantly tightening global oil and gas supplies and pushing prices higher.&nbsp;The review stated that the conflict's impact would be felt through "supply disruptions to oil, gas and fertilisers, higher import prices, higher logistics costs, and a possible decline in remittances by Indians in Gulf countries."&nbsp;On the positive side, the report mentioned that "strong growth in steel and cement production, alongside steady expansion in coal and fertilisers, underscores sustained momentum in infrastructure and construction activity."&nbsp;Also Read: <a href="https://www.wionews.com/world/watch-us-central-command-shares-footage-of-strikes-on-iranian-naval-vessels-1774714620981">Watch: US Central Command shares footage of strikes on Iranian naval vessels</a>&nbsp;The financial sector remained supportive of economic activity, with bank credit growth rising 14.5 per cent year-on-year in February. The report also highlighted that "the overall flow of financial resources to the commercial sector grew by 33.2 per cent (YoY)."&nbsp;However, "retail inflation rose to a 10-month high of 3.21 per cent in February 2026, driven primarily by a sharp uptick in food prices," the review stated.&nbsp;Prime Minister Narendra Modi also flagged concerns in his recent address to Parliament. "The difficult global conditions caused by this war are likely to persist for a long time... we must be prepared to face the long-term impact," he said.&nbsp;"This war has created a serious energy crisis across the entire world. The routine supply of petrol, diesel, gas, and fertilisers has been affected... India is making every effort to ensure uninterrupted supplies," he added.

The report highlighted that the conflict in West Asia has sparked fears of a dip in global growth and a surge in inflation due to disruptions in the Strait of Hormuz, through which 20 per cent of global oil transits.

India's economic outlook has become "more uncertain" due to the ongoing escalation and geopolitical tensions in West Asia, which have resulted in substantial energy disruption and logistical headwinds, the Finance Ministry's monthly economic review for March 2026 noted. "The economic outlook has become more uncertain in the wake of recent geopolitical developments in West Asia, which have disrupted key energy and logistics channels and led to a tightening of global supply conditions," the report said. The Department of Economic Affairs pointed out that India's economic prospects remained "robust" until February 2026, supported by strong demand and industrial activity. "Prior to the onset of these developments, economic activity in India remained robust up to February 2026, with strong performance across both supply and demand-side indicators," the report added. It highlighted that the conflict in West Asia has sparked fears of a dip in global growth and a surge in inflation due to disruptions in the Strait of Hormuz, through which 20 per cent of global oil transits. The review said ship transits through the strait have nearly come to a halt, dropping to “one a week, as against 200–300 a week,” significantly tightening global oil and gas supplies and pushing prices higher. The review stated that the conflict's impact would be felt through "supply disruptions to oil, gas and fertilisers, higher import prices, higher logistics costs, and a possible decline in remittances by Indians in Gulf countries." On the positive side, the report mentioned that "strong growth in steel and cement production, alongside steady expansion in coal and fertilisers, underscores sustained momentum in infrastructure and construction activity." Also Read: Watch: US Central Command shares footage of strikes on Iranian naval vessels The financial sector remained supportive of economic activity, with bank credit growth rising 14.5 per cent year-on-year in February. The report also highlighted that "the overall flow of financial resources to the commercial sector grew by 33.2 per cent (YoY)." However, "retail inflation rose to a 10-month high of 3.21 per cent in February 2026, driven primarily by a sharp uptick in food prices," the review stated. Prime Minister Narendra Modi also flagged concerns in his recent address to Parliament. "The difficult global conditions caused by this war are likely to persist for a long time... we must be prepared to face the long-term impact," he said. "This war has created a serious energy crisis across the entire world. The routine supply of petrol, diesel, gas, and fertilisers has been affected... India is making every effort to ensure uninterrupted supplies," he added.

The report highlighted that the conflict in West Asia has sparked fears of a dip in global growth and a surge in inflation due to disruptions in the Strait of Hormuz, through which 20 per cent of global oil transits.

After PM Modi's caution, Finance Ministry says India's economic outlook has become 'more uncertain' due to West Asia war

The Organisation for Economic Co-operation and Development (OECD) has sharply downgraded its global economic growth outlook, warning that a combination of rising trade barriers, policy uncertainty, and persistent inflation could slow growth more than anticipated.According to the OECD's latest Economic Outlook, global GDP growth is projected to decelerate to just 2.9 per cent in 2025 and 2026 from 3.3 per cent in 2024—substantially below previous projections.The report attributed the slowdown to escalating trade tensions, particularly the fallout from the Trump administration's tariff policies, which have had a ripple effect on global supply chains and business investment.&nbsp;What is dragging global growth?&nbsp;The OECD's report highlights that the global economic outlook has grown more challenging as trade barriers have risen sharply. New tariffs, particularly between the US and several major trading partners, have pushed global trade to a standstill.The OECD warns that further protectionist measures could exacerbate inflationary pressures, disrupt global supply chains, and increase economic policy uncertainty, all of which are likely to dampen growth prospects for many countries.“Substantial increases in trade barriers and tighter financial conditions will have marked adverse effects on global growth if they persist,” the OECD report states.Rising trade costs, especially tariffs, are pushing up inflation, although this may be partially offset by falling commodity prices in some regions. Despite the anticipated slowdown, the OECD also notes that a reversal of recent tariff hikes could provide a much-needed boost to global economic activity and ease some inflationary pressures.In the United States, the forecast for economic growth has been cut significantly. The US economy is now expected to expand at only 1.6 per cent in 2025, a sharp decline from earlier forecasts. The main reasons for the downgrade are the increase in tariff rates, retaliatory measures from trading partners, and policy uncertainty surrounding the trade war.This slowdown is exacerbated by rising inflation, which the OECD expects will remain above target, staying near 4 per cent by the end of 2025. Higher import prices, resulting from tariffs, are eroding consumer purchasing power, while economic policy uncertainty has also caused businesses to hold back on investment.While the Eurozone is seeing more moderate growth expectations, China’s growth has also been impacted. The OECD revised its forecast for China down to 4.7 per cent for 2025, slightly lower than earlier predictions. Despite this, China’s government is trying to offset the economic damage through fiscal stimulus and welfare transfers aimed at boosting domestic demand.On the other hand, India’s real GDP is projected to grow by 6.3 per cent in fiscal year 2025-26 and 6.4 per cent in 2026-27. The report predicts that private consumption will gradually strengthen, driven by rising real incomes that are helped by moderate inflation, recent tax cuts and a strengthening of the labour market.Investment in India will be supported by declining interest rates and substantial public capital spending, but higher US tariffs will weigh on exports. Inflation will remain contained at around 4 per cent as economic activity grows around the trend. A less benign monsoon season or higher global commodity prices could drive up food prices and inflation.&nbsp;Inflation and investment woes&nbsp;Globally, inflation is expected to remain elevated for longer than anticipated. The OECD’s inflation forecast for 2025 has been revised upward to 4.2 per cent from 3.7 per cent in earlier projections, with inflation expected to remain above 3 per cent in 2026 as well. This persistent inflation is largely attributed to ongoing trade disruptions and the inflationary effects of tariffs, which are also expected to stifle investment.Investment has been sluggish in many advanced economies since the global financial crisis, with weak business confidence further exacerbating the problem. The OECD emphasises that without a significant increase in investment, especially in public infrastructure and housing, many economies will face longer-term stagnation, weakening their potential growth.The OECD report also stressed that a major driver of the slowdown is the weakening of business investment due to heightened uncertainty and inflationary pressures. This situation, combined with a lack of capital accumulation, threatens the ability of advanced economies to regain a strong growth trajectory.&nbsp;Policy solutions: A path to resilient growth&nbsp;To mitigate these challenges, the OECD suggests several key policy interventions. First, reducing international trade barriers and addressing policy uncertainty could stimulate growth and reduce inflationary pressures. Governments are encouraged to diversify supply chains, encourage competition, and support entrepreneurship to reinvigorate investment.Monetary policy must also remain vigilant to keep inflation in check while fostering an environment conducive to investment. Central banks, according to the OECD, should maintain low interest rates where inflation expectations are under control and adjust rates as necessary to support demand.Finally, the OECD advises governments to focus on reducing public debt ratios and rebuilding fiscal space to respond to future economic shocks, particularly those related to climate change and population ageing.With the global outlook facing significant headwinds, the OECD stresses that coordinated international action to lower trade barriers and reduce policy uncertainty is essential to ensure a more robust and resilient global economy in the years ahead.

According to the OECD's latest Economic Outlook, global GDP growth is projected to decelerate to just 2.9 per cent in 2025 and 2026 from 3.3 per cent in 2024—substantially below previous projections.

The Organisation for Economic Co-operation and Development (OECD) has sharply downgraded its global economic growth outlook, warning that a combination of rising trade barriers, policy uncertainty, and persistent inflation could slow growth more than anticipated. According to the OECD's latest Economic Outlook, global GDP growth is projected to decelerate to just 2.9 per cent in 2025 and 2026 from 3.3 per cent in 2024—substantially below previous projections. The report attributed the slowdown to escalating trade tensions, particularly the fallout from the Trump administration's tariff policies, which have had a ripple effect on global supply chains and business investment. What is dragging global growth? The OECD's report highlights that the global economic outlook has grown more challenging as trade barriers have risen sharply. New tariffs, particularly between the US and several major trading partners, have pushed global trade to a standstill. The OECD warns that further protectionist measures could exacerbate inflationary pressures, disrupt global supply chains, and increase economic policy uncertainty, all of which are likely to dampen growth prospects for many countries. “Substantial increases in trade barriers and tighter financial conditions will have marked adverse effects on global growth if they persist,” the OECD report states. Rising trade costs, especially tariffs, are pushing up inflation, although this may be partially offset by falling commodity prices in some regions. Despite the anticipated slowdown, the OECD also notes that a reversal of recent tariff hikes could provide a much-needed boost to global economic activity and ease some inflationary pressures. In the United States, the forecast for economic growth has been cut significantly. The US economy is now expected to expand at only 1.6 per cent in 2025, a sharp decline from earlier forecasts. The main reasons for the downgrade are the increase in tariff rates, retaliatory measures from trading partners, and policy uncertainty surrounding the trade war. This slowdown is exacerbated by rising inflation, which the OECD expects will remain above target, staying near 4 per cent by the end of 2025. Higher import prices, resulting from tariffs, are eroding consumer purchasing power, while economic policy uncertainty has also caused businesses to hold back on investment. While the Eurozone is seeing more moderate growth expectations, China’s growth has also been impacted. The OECD revised its forecast for China down to 4.7 per cent for 2025, slightly lower than earlier predictions. Despite this, China’s government is trying to offset the economic damage through fiscal stimulus and welfare transfers aimed at boosting domestic demand. On the other hand, India’s real GDP is projected to grow by 6.3 per cent in fiscal year 2025-26 and 6.4 per cent in 2026-27. The report predicts that private consumption will gradually strengthen, driven by rising real incomes that are helped by moderate inflation, recent tax cuts and a strengthening of the labour market. Investment in India will be supported by declining interest rates and substantial public capital spending, but higher US tariffs will weigh on exports. Inflation will remain contained at around 4 per cent as economic activity grows around the trend. A less benign monsoon season or higher global commodity prices could drive up food prices and inflation. Inflation and investment woes Globally, inflation is expected to remain elevated for longer than anticipated. The OECD’s inflation forecast for 2025 has been revised upward to 4.2 per cent from 3.7 per cent in earlier projections, with inflation expected to remain above 3 per cent in 2026 as well. This persistent inflation is largely attributed to ongoing trade disruptions and the inflationary effects of tariffs, which are also expected to stifle investment. Investment has been sluggish in many advanced economies since the global financial crisis, with weak business confidence further exacerbating the problem. The OECD emphasises that without a significant increase in investment, especially in public infrastructure and housing, many economies will face longer-term stagnation, weakening their potential growth. The OECD report also stressed that a major driver of the slowdown is the weakening of business investment due to heightened uncertainty and inflationary pressures. This situation, combined with a lack of capital accumulation, threatens the ability of advanced economies to regain a strong growth trajectory. Policy solutions: A path to resilient growth To mitigate these challenges, the OECD suggests several key policy interventions. First, reducing international trade barriers and addressing policy uncertainty could stimulate growth and reduce inflationary pressures. Governments are encouraged to diversify supply chains, encourage competition, and support entrepreneurship to reinvigorate investment. Monetary policy must also remain vigilant to keep inflation in check while fostering an environment conducive to investment. Central banks, according to the OECD, should maintain low interest rates where inflation expectations are under control and adjust rates as necessary to support demand. Finally, the OECD advises governments to focus on reducing public debt ratios and rebuilding fiscal space to respond to future economic shocks, particularly those related to climate change and population ageing. With the global outlook facing significant headwinds, the OECD stresses that coordinated international action to lower trade barriers and reduce policy uncertainty is essential to ensure a more robust and resilient global economy in the years ahead.

According to the OECD's latest Economic Outlook, global GDP growth is projected to decelerate to just 2.9 per cent in 2025 and 2026 from 3.3 per cent in 2024—substantially below previous projections.

OECD slashes global growth forecast amid rising trade barriers and inflation

Fitch ratings has affirmed Israel's long-term sovereign debt rating at a+, despite the ongoing conflict in Gaza. However, the outlook has been downgraded to negative, signalling caution amid heightened geopolitical risks. This decision comes in contrast to Moody's ratings downgrade in February. Watch in for more details!

Fitch ratings affirms Israel's A+ rating with negative outlook

A united nations report is predicting a marked slowdown in growth for 2024. After a surprisingly strong 2023, the international outlook is shifting, with headwinds from rising debt, slowing trade, and geopolitical tensions posing significant challenges.

UN Report: Trade, debt, geopolitics cast shadow on outlook

From policymakers to the general public, everyone is hoping for a stable and growing economy in 2024.&nbsp;

The world has been in bad shape since 2020. To begin with, Covid-19 pandemic-related restrictions disrupted day-to-day economic activity. Later, the Ukraine war disrupted global supply chains and impacted commodity prices.

The twin blows contributed to a slowdown in 2023, with the world economy expected to grow by just three per cent.

Global economic projections for 2024, too, are not rosy. Global growth is expected to slow to 2.9 per cent, as per the International Monetary Fund.

"The global economy continues to recover from the pandemic, Ukraine war and the cost-of-living crisis. In retrospect, the resilience has been remarkable. Even so, growth remains slow and uneven, with widening divergences," writes academician Pierre-Olivier Gourinchas in an IMF blog.

A lot would depend on these five factors since they could make-or-break the world economy.

1) Rate cuts by the Fed &amp; other central banks

Everyone expects the US Fed to start cutting rates from April this year. The economy continues to grow, albeit at a slower pace, and inflation is closer to the Federal Reserve's 2 per cent target.

The US grew at 5.2 per cent in the July-September quarter - the fastest pace of expansion since the last three months of 2021. The annual inflation rate stood at 3.1 per cent at the end of November.

Many expect at least three rate cuts this year, with the monetary cycle likely to continue up to 2025-end. It is estimated that the Fed may go for at least a 2.5 per cent reduction in interest rates over the next 18-24 months.

The rate cuts are likely certain help the global economy, as spending and consumption will get a boost due to the easing monetary policy. This will also give thumbs up to other central banks to follow suit.

Apart from the US Fed, all eyes will be the actions taken by the European Central Bank, Bank of England, Bank of Japan and the Reserve Bank of India.

However, if inflation makes a comeback or tensions heighten in West Asia and East Asia, the US central bank may be forced to keep the rates steady or even raise them.&nbsp;&nbsp;&nbsp;

2) Geopolitical tensions

The Ukraine war, tensions in West Asia, and the growing rivalry between the US and China have had a significant impact on the global economy in recent years.

These geopolitical events have disrupted economic activities, threatening to fragment global trade into smaller blocks, hamper supply chains, and increase prices of essential commodities.

These tensions will spill over to 2024 too.

"The current conflicts (in Ukraine and West Asia) appear to be long term. At best, they could cause volatility in oil markets. At worst, they could fragment the economy and trade system further," a recent Deutsche Bank analysis reads.

The rivalry between the US and China will be closely watched. Already locked in a trade war since 2018, any further escalation between the two biggest economies could drag global growth and make the world a less integrated place — ‘de-globalised’ in other words.

Any drastic action across the Taiwan straits will have global ramifications, with a particular impact on the semiconductor industry and the ongoing artificial intelligence boom.

More so, a 'black swan' event like the Ukraine war will add to the uncertainties.

3) Recession in advanced countries

Slower economic growth raises the fear of a prolonged recession in 2024.

However, the US – the world’s largest economy – likely to skip recession this year, after defying the odds in 2023.

Though that’s the general consensus, but some outliers believe that unemployment may rise in 2024. This, they argue, will have a ripple effect on consumer spending, leading to a recession.

But the Euro Zone, struggling for a while now, is unlikely to get lucky. Factory output has been declining for over 18 months now. The 20-member currency union will not only enter 2024 in technical recession but there is also a high possibility of long-term trouble for the economy.

The IMF's anticipates a slight recovery in 2024. But a lot would depend on the fine balancing act of curbing inflation – still way above the central bank’s target – and fueling growth.

Any rise in inflation – largely energy-driven – will keep prices elevated and growth in the negative territory.

The worst hit will be the United Kingdom, whose economy is on the cusp of a recession after shrinking in 2023. In fact, the Bank of England has warned of recession around the time of elections, likely to be held in mid-2024. The country is likely to see zero growth this year, irrespective of recession.

4) Growing debt burden

The debt burden is likely to remain a big concern, especially in the developing world.

Debt servicing costs will rise by 39 per cent for the 24 poorest countries this year, as per The World Bank.

The poorest countries face a huge $3.5 trillion debt burden. In the absence of any resolution mechanism, they could default.

As per reports, these countries, often dubbed 'frontier markets', will have to repay about $200 billion of debt in 2024.

This, in the words of Indermit Gill, the World Bank Group’s Chief Economist, will force developing countries to choice between servicing their public debts and investing in public health, education, and infrastructure.

The focus will be on the World Bank, the International Monetary Fund &amp; China – the biggest lenders. Any resolution to the debt crisis in 2024 will depend on these key players.

5) Elections around the world

Over half of humanity will go to polls, covering at least 40 countries. They represent half of the world’s Gross Domestic Product, raising the stakes for businesses.

India, the United States and the United Kingdom are among the major countries set to go to polls this year.

India is on track to be the third-biggest economy in the world and the markets are betting on Prime Minister Narendra Modi's third consecutive&nbsp;term.

In the US, a possible re-election of Donald Trump could push global trade – especially with China – into a tailspin.

Across the Atlantic, all eyes will be on the Labour party, which is tipped to win the UK elections amid the economic crisis.

Any expected or unexpected political changes will have economic implications for the world.

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From policymakers to the general public, everyone is hoping for a stable and growing economy in 2024. The world has been in bad shape since 2020. To begin with, Covid-19 pandemic-related restrictions disrupted day-to-day economic activity.

From policymakers to the general public, everyone is hoping for a stable and growing economy in 2024. The world has been in bad shape since 2020. To begin with, Covid-19 pandemic-related restrictions disrupted day-to-day economic activity. Later, the Ukraine war disrupted global supply chains and impacted commodity prices. The twin blows contributed to a slowdown in 2023, with the world economy expected to grow by just three per cent. Global economic projections for 2024, too, are not rosy. Global growth is expected to slow to 2.9 per cent, as per the International Monetary Fund. "The global economy continues to recover from the pandemic, Ukraine war and the cost-of-living crisis. In retrospect, the resilience has been remarkable. Even so, growth remains slow and uneven, with widening divergences," writes academician Pierre-Olivier Gourinchas in an IMF blog. A lot would depend on these five factors since they could make-or-break the world economy. 1) Rate cuts by the Fed & other central banks Everyone expects the US Fed to start cutting rates from April this year. The economy continues to grow, albeit at a slower pace, and inflation is closer to the Federal Reserve's 2 per cent target. The US grew at 5.2 per cent in the July-September quarter - the fastest pace of expansion since the last three months of 2021. The annual inflation rate stood at 3.1 per cent at the end of November. Many expect at least three rate cuts this year, with the monetary cycle likely to continue up to 2025-end. It is estimated that the Fed may go for at least a 2.5 per cent reduction in interest rates over the next 18-24 months. The rate cuts are likely certain help the global economy, as spending and consumption will get a boost due to the easing monetary policy. This will also give thumbs up to other central banks to follow suit. Apart from the US Fed, all eyes will be the actions taken by the European Central Bank, Bank of England, Bank of Japan and the Reserve Bank of India. However, if inflation makes a comeback or tensions heighten in West Asia and East Asia, the US central bank may be forced to keep the rates steady or even raise them. 2) Geopolitical tensions The Ukraine war, tensions in West Asia, and the growing rivalry between the US and China have had a significant impact on the global economy in recent years. These geopolitical events have disrupted economic activities, threatening to fragment global trade into smaller blocks, hamper supply chains, and increase prices of essential commodities. These tensions will spill over to 2024 too. "The current conflicts (in Ukraine and West Asia) appear to be long term. At best, they could cause volatility in oil markets. At worst, they could fragment the economy and trade system further," a recent Deutsche Bank analysis reads. The rivalry between the US and China will be closely watched. Already locked in a trade war since 2018, any further escalation between the two biggest economies could drag global growth and make the world a less integrated place — ‘de-globalised’ in other words. Any drastic action across the Taiwan straits will have global ramifications, with a particular impact on the semiconductor industry and the ongoing artificial intelligence boom. More so, a 'black swan' event like the Ukraine war will add to the uncertainties. 3) Recession in advanced countries Slower economic growth raises the fear of a prolonged recession in 2024. However, the US – the world’s largest economy – likely to skip recession this year, after defying the odds in 2023. Though that’s the general consensus, but some outliers believe that unemployment may rise in 2024. This, they argue, will have a ripple effect on consumer spending, leading to a recession. But the Euro Zone, struggling for a while now, is unlikely to get lucky. Factory output has been declining for over 18 months now. The 20-member currency union will not only enter 2024 in technical recession but there is also a high possibility of long-term trouble for the economy. The IMF's anticipates a slight recovery in 2024. But a lot would depend on the fine balancing act of curbing inflation – still way above the central bank’s target – and fueling growth. Any rise in inflation – largely energy-driven – will keep prices elevated and growth in the negative territory. The worst hit will be the United Kingdom, whose economy is on the cusp of a recession after shrinking in 2023. In fact, the Bank of England has warned of recession around the time of elections, likely to be held in mid-2024. The country is likely to see zero growth this year, irrespective of recession. 4) Growing debt burden The debt burden is likely to remain a big concern, especially in the developing world. Debt servicing costs will rise by 39 per cent for the 24 poorest countries this year, as per The World Bank. The poorest countries face a huge $3.5 trillion debt burden. In the absence of any resolution mechanism, they could default. As per reports, these countries, often dubbed 'frontier markets', will have to repay about $200 billion of debt in 2024. This, in the words of Indermit Gill, the World Bank Group’s Chief Economist, will force developing countries to choice between servicing their public debts and investing in public health, education, and infrastructure. The focus will be on the World Bank, the International Monetary Fund & China – the biggest lenders. Any resolution to the debt crisis in 2024 will depend on these key players. 5) Elections around the world Over half of humanity will go to polls, covering at least 40 countries. They represent half of the world’s Gross Domestic Product, raising the stakes for businesses. India, the United States and the United Kingdom are among the major countries set to go to polls this year. India is on track to be the third-biggest economy in the world and the markets are betting on Prime Minister Narendra Modi's third consecutive term. In the US, a possible re-election of Donald Trump could push global trade – especially with China – into a tailspin. Across the Atlantic, all eyes will be on the Labour party, which is tipped to win the UK elections amid the economic crisis. Any expected or unexpected political changes will have economic implications for the world.

2024 Economic Outlook: 5 key things to watch out this year

This year has not been kind to the global economy. The Ukraine war led to soaring global inflation, forcing central banks to hike interest rates to highs not seen in decades. Geopolitical tensions between China and the United States have raised the spectre of trade fragmenting among allied blocks.

The disruption caused by Covid lockdowns continues to have lingering effects, seen via China's lacklustre growth and the rising debt burden. Add the ongoing tensions in West Asia to this mix, and the world has enough reasons to worry.

The world will welcome 2024 in a couple of weeks. But expectations of a brighter future may be far-fetched if Moody's latest outlook on 2024 is considered.

Moody's Global Macro Outlook 2024-25 suggests that the world economy will slow in 2024 as high-interest rates "percolate through credit channels to the real economy".

This means households would only feel the true impact of the high interest rates next year.

While the high-interest rates may help central banks reduce inflation, it won't be by the end of 2025 that prices will come under the tolerance limits of G-20 central banks.

Conversely, consumer demand will weaken in 2024 as central banks will likely maintain a tight policy stance. However, the report cautions policymakers about climate uncertainties or geopolitical events triggering volatility in energy and food prices in 2024.

The report particularly focuses on the G-20 nations, which account for at least 80 per cent of the world's Gross Domestic Product, 75 per cent of global trade, and two-thirds of the total population.

Moody's expects growth in the G20 countries to fall to 2.1 per cent in 2024 from 2.8 per cent in 2023. However, the pace of growth would be different across all the member nations.

Economic growth would fall from 1.7 per cent in 2023 to just one per cent in advanced G-20 economies -- these are also OECD members.

The growth in emerging markets of the G20 would fall from 4.3 per cent in 2023 to 3.7 per cent next year. But the true story lies in the fine print.

Economic growth will moderate in the United States while remaining "subdued" in the 20-nation euro zone area. China's economy- the world's second-biggest- is likely to decelerate from its 5 percent growth target in 2023 to 4 percent in 2024.

However, China's emerging rivals like India, Mexico and Indonesia will likely show resilience next year. In fact, at 6.1 per cent, India is expected to be the fastest-growing economy among the G20 nations.

The outlook is more complicated in South Africa, Türkiye, and Argentina, which are facing a prolonged economic downturn.

"South Africa's economy remains vulnerable to rolling power cuts, curtailing the productive capacity of the economy," says the report, while noting the uncertain economic outlooks for Türkiye and Argentina.

Türkiye's economy is expected to slow to 2.6 per cent in 2024, with inflation likely to recede slowly to 60% in 2024. But everything would hinge on a tighter monetary policy and the lira's stability.

Argentina's economy will be a mystery waiting to be unravelled in 2024. A lot would depend upon how the incoming Libertarian maverick Javier Milei responds to the South American country's economic challenges.

Geopolitical risks like the Israel-Hamas war in Gaza and the ongoing tensions between the US and China will be sources of uncertainty for the global economy next year.

If the ongoing conflict in Gaza spills over to the larger West Asia region, the world may see higher volatility in oil and gas prices.

"We expect oil prices to remain volatile in the $80-$90 per barrel range and periodically overshoot $90 due to increased geopolitical uncertainty," the report adds.

After the US ' export restrictions on semiconductors, China's tit-for-tat measure to impose export controls on graphite underscores the threat of trade tensions disrupting the global supply of critical materials.

But the tensions can also end up helping other emerging economies to emerge as supply chain hubs, with India, Brazil, Mexico and Indonesia "well-positioned to take advantage of this shift".

This year has not been kind to the global economy. The Ukraine war led to soaring global inflation, forcing central banks to hike interest rates to highs not seen in decades.

This year has not been kind to the global economy. The Ukraine war led to soaring global inflation, forcing central banks to hike interest rates to highs not seen in decades. Geopolitical tensions between China and the United States have raised the spectre of trade fragmenting among allied blocks. The disruption caused by Covid lockdowns continues to have lingering effects, seen via China's lacklustre growth and the rising debt burden. Add the ongoing tensions in West Asia to this mix, and the world has enough reasons to worry. The world will welcome 2024 in a couple of weeks. But expectations of a brighter future may be far-fetched if Moody's latest outlook on 2024 is considered. Moody's Global Macro Outlook 2024-25 suggests that the world economy will slow in 2024 as high-interest rates "percolate through credit channels to the real economy". This means households would only feel the true impact of the high interest rates next year. While the high-interest rates may help central banks reduce inflation, it won't be by the end of 2025 that prices will come under the tolerance limits of G-20 central banks. Conversely, consumer demand will weaken in 2024 as central banks will likely maintain a tight policy stance. However, the report cautions policymakers about climate uncertainties or geopolitical events triggering volatility in energy and food prices in 2024. The report particularly focuses on the G-20 nations, which account for at least 80 per cent of the world's Gross Domestic Product, 75 per cent of global trade, and two-thirds of the total population. Moody's expects growth in the G20 countries to fall to 2.1 per cent in 2024 from 2.8 per cent in 2023. However, the pace of growth would be different across all the member nations. Economic growth would fall from 1.7 per cent in 2023 to just one per cent in advanced G-20 economies -- these are also OECD members. The growth in emerging markets of the G20 would fall from 4.3 per cent in 2023 to 3.7 per cent next year. But the true story lies in the fine print. Economic growth will moderate in the United States while remaining "subdued" in the 20-nation euro zone area. China's economy- the world's second-biggest- is likely to decelerate from its 5 percent growth target in 2023 to 4 percent in 2024. However, China's emerging rivals like India, Mexico and Indonesia will likely show resilience next year. In fact, at 6.1 per cent, India is expected to be the fastest-growing economy among the G20 nations. The outlook is more complicated in South Africa, Türkiye, and Argentina, which are facing a prolonged economic downturn. "South Africa's economy remains vulnerable to rolling power cuts, curtailing the productive capacity of the economy," says the report, while noting the uncertain economic outlooks for Türkiye and Argentina. Türkiye's economy is expected to slow to 2.6 per cent in 2024, with inflation likely to recede slowly to 60% in 2024. But everything would hinge on a tighter monetary policy and the lira's stability. Argentina's economy will be a mystery waiting to be unravelled in 2024. A lot would depend upon how the incoming Libertarian maverick Javier Milei responds to the South American country's economic challenges. Geopolitical risks like the Israel-Hamas war in Gaza and the ongoing tensions between the US and China will be sources of uncertainty for the global economy next year. If the ongoing conflict in Gaza spills over to the larger West Asia region, the world may see higher volatility in oil and gas prices. "We expect oil prices to remain volatile in the $80-$90 per barrel range and periodically overshoot $90 due to increased geopolitical uncertainty," the report adds. After the US ' export restrictions on semiconductors, China's tit-for-tat measure to impose export controls on graphite underscores the threat of trade tensions disrupting the global supply of critical materials. But the tensions can also end up helping other emerging economies to emerge as supply chain hubs, with India, Brazil, Mexico and Indonesia "well-positioned to take advantage of this shift".

2024 Outlook: Slow growth, elevated inflation & geopolitical tensions to keep the world economy on its toes

#ThisWorld | China's GDP growth rate has slowed down. The national debt is nearing the IMF red line & now property giant Evergrande has filed for bankruptcy. Has Beijing's growth story hit a roadblock?

China cuts key rates as weak batch of July data darkens economic outlook

The International Monetary Fund said on Sunday that the global economic outlook is even gloomier than projected last month. It cited a steady worsening in purchasing manager surveys in recent months

WION Business News | Global economic outlook getting `gloomier`, says IMF

Executives at electric car marker Tesla, drug maker Novartis and retailer Bed Bath and Beyond are cutting spending or jobs in U.S. while others are shelving projects or deals as inflation rages and confidence in the world economy wanes.

Companies cut spending, jobs as economic outlook grows less certain

The coronavirus pandemic is expected to severely weaken Afghanistan`s economy, the World Bank said on Wednesday, as donor governments struggle themselves and uncertainty over peace talks curb private investment.

The World Bank said it was forecasting gross domestic product to contract between 5.5 per cent and 7.4 per cent in 2020, compared with growth of 2.9 per cent&nbsp;in 2019, with more than 70 per cent of the population expected to slip under the poverty line.

"COVID-19 has hit Afghanistan in the midst of a difficult political transition, an intensifying conflict, and significant uncertainty regarding future grant support," Henry Kerali, World Bank Afghanistan director, told reporters.

<a href="https://www.wionews.com/south-asia/european-union-in-contact-with-india-on-afghan-peace-process-officials-313291">Also read|&nbsp;European Union in contact with India on Afghan peace process: Officials</a>

Due to the lockdown, domestic government revenue is expected to fall up to 30 per cent at a time when the economists and diplomats say Afghanistan is facing a likely fall in foreign funding as countries deal with their own economic crises at home and the United States withdraws troops and attempts to usher peace talks between the insurgent Taliban and the Afghan government.

With few options to borrow and investment stalled by years conflict, the government is heavily reliant on foreign aid. Pledges made by foreign donors in 2016 run out this year, with a conference to renew pledges due in November.

"Without progress towards a sustainable peace and commitments to continued grant support from international partners, medium-term prospects appear increasingly grim," the World Bank said.

Ministry of Finance spokesman Shamroz Khan Masjedi said the government was concerned about the impact of COVID-19 on the economy.

"There will be more unemployment, more poverty and reduction in government revenue because many business and economic activities ... have stopped," he said.

The coronavirus pandemic is expected to severely weaken Afghanistan`s economy, the World Bank said on Wednesday, as donor governments struggle themselves and uncertainty over peace talks curb private investment.

The coronavirus pandemic is expected to severely weaken Afghanistan`s economy, the World Bank said on Wednesday, as donor governments struggle themselves and uncertainty over peace talks curb private investment. The World Bank said it was forecasting gross domestic product to contract between 5.5 per cent and 7.4 per cent in 2020, compared with growth of 2.9 per cent in 2019, with more than 70 per cent of the population expected to slip under the poverty line. "COVID-19 has hit Afghanistan in the midst of a difficult political transition, an intensifying conflict, and significant uncertainty regarding future grant support," Henry Kerali, World Bank Afghanistan director, told reporters. Also read| European Union in contact with India on Afghan peace process: Officials Due to the lockdown, domestic government revenue is expected to fall up to 30 per cent at a time when the economists and diplomats say Afghanistan is facing a likely fall in foreign funding as countries deal with their own economic crises at home and the United States withdraws troops and attempts to usher peace talks between the insurgent Taliban and the Afghan government. With few options to borrow and investment stalled by years conflict, the government is heavily reliant on foreign aid. Pledges made by foreign donors in 2016 run out this year, with a conference to renew pledges due in November. "Without progress towards a sustainable peace and commitments to continued grant support from international partners, medium-term prospects appear increasingly grim," the World Bank said. Ministry of Finance spokesman Shamroz Khan Masjedi said the government was concerned about the impact of COVID-19 on the economy. "There will be more unemployment, more poverty and reduction in government revenue because many business and economic activities ... have stopped," he said.

Afghanistan faces 'grim' economic outlook as pandemic wipes out growth: World Bank

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