watch
now
Borge
Brende,
president
of
the
World
Economic
Forum,
gave
a
stark
outlook
for
the
global
economy
saying
the
world
faces
a
decade
of
low
growth
if
the
right
economic
measures
are
not
applied.
Speaking
Sunday
at
WEF’s
“Special
Meeting
on
Global
Collaboration,
Growth
and
Energy
for
Development”
in
Riyadh,
Saudi
Arabia,
he
warned
that
global
debt
ratios
are
close
to
levels
not
seen
since
the
1820s
and
there
was
a
“stagflation”
risk
for
advanced
economies.
“The
global
growth
[estimate]
this
year
is
around
3.2
[%].
It’s
not
bad,
but
it’s
not
what
we
were
used
to
—
the
trend
growth
used
to
be
4%
for
decades,”
he
told
CNBC’s
Dan
Murphy,
adding
that
there
was
a
risk
of
a
slowdown
like
that
seen
in
the
1970s
in
some
major
economies.
“We
cannot
get
into
a
trade
war,
we
still
have
to
trade
with
each
other,”
he
explained
when
asked
about
avoiding
a
period
of
low
growth.
“Trade
will
change
and
global
value
chains
—
there
will
be
some
more
near-shoring
and
friend-shoring
—
but
we
shouldn’t
lose
the
baby
with
the
bathwater
…
Then
we
have
to
address
the
global
debt
situation.
We
haven’t
seen
this
kind
of
debt
since
the
Napoleonic
Wars,
we
are
getting
close
to
100%
of
the
global
GDP
in
debt,”
he
said.
He
said
governments
needed
to
consider
how
to
reduce
that
debt
and
take
the
right
fiscal
measures
without
getting
into
a
situation
where
it
kicks
off
a
recession.
He
also
motioned
persistent
inflationary
pressures
and
that
generative
artificial
intelligence
could
be
an
opportunity
for
the
developing
world.
Borge
Brende,
president
of
the
World
Economic
Forum
(WEF).
Bloomberg
|
Bloomberg
|
Getty
Images
His
warning
chimes
with
a
recent
report
from
the
International
Monetary
Fund
which
noted
that
global
public
debt
had
edged
up
to
93%
of
GDP
last
year,
and
was
still
9
percentage
points
higher
than
pre-pandemic
levels.
The
IMF
projected
that
global
public
debt
could
near
100 %
of
GDP
by
the
end
of
the
decade.
The
Fund
also
singled
out
the
high
debt
levels
in
China
and
the
United
States,
saying
loose
fiscal
policy
in
the
latter
puts
pressure
on
rates
and
the
dollar
which
then
pushes
up
funding
costs
around
the
world
—exacerbating
pre-existing
fragilities.
Earlier
this
month,
the
International
Monetary
Fund
raised
its
global
growth
forecast
slightly,
saying
the
world
economy
had
proven
“surprisingly
resilient”
despite
inflationary
pressures
and
monetary
policy
shifts.
It
now
expects
global
growth
of
3.2%
in
2024,
up
by
a
modest
0.1
percentage
point
from
its
earlier
January
forecast.
WEF’s
Brende
said
Sunday
that
the
biggest
risk
for
the
global
economy
is
now
“the
geopolitical
recession
that
we
are
faced
with,”
highlighting
recent
Iran-Israel
tensions.
“There
is
so
much
unpredictability,
and
you
can
easily
get
out
of
control.
If
Israel
and
Iran
escalated
that
conflict,
we
could
have
seen
an
oil
price
of
$150
overnight.
And
that
would
of
course
be
very
damaging
for
the
global
economy,”
he
said.
