- The global economy is under pressure, weighed down by trade tensions, inequality and geopolitical uncertainty.
- The world is at an economic "tipping point", amid a backlash against capitalism and globalization.
- The transition to a greener, more equitable economy is necessary for productivity and growth.
As 2020 gets underway, the global economy is at a crossroads. Rising inequality, trade tensions, technological disruptions, climate change and geopolitical uncertainty all threaten to weigh on already-fragile economic growth at the start of the new decade.
As the Forum's Global Risks Report 2020 makes clear, the global economy "is facing an increased risk of stagnation... all while citizens worldwide protest political and economic conditions and voice concerns about systems that exacerbate inequality."
The International Monetary Fund in October lowered its outlook for global growth for 2019 and 2020, noting that “rising trade and geopolitical tensions have increased uncertainty about the future of the global trading system and international cooperation more generally, taking a toll on business confidence, investment decisions and global trade.”
The world is at an economic "tipping point", according to the Forum's most recent Global Competitiveness Report. It highlights a "backlash against capitalism, globalization, technology and elites." At the same time, the report notes that trade and geopolitical tensions have held back global investment and increased supply shocks, including "disruptions to global supply chains, sudden price spikes or interruptions in the availability of key resources".
But the situation is not all bleak. Despite these very real challenges to the economic framework, there is also cause for optimism in the new year -- if policymakers and business leaders act in coordination both quickly and forcefully.
As Klaus Schwab and Saadia Zahidi wrote in a recent blog post, "the transition to a greener and more equal economy is not just possible but imperative for restoring productivity...[and] the technologies of the Fourth Industrial Revolution offer us the tools to realize this vision."
That's also one of the takeaways of the Forum's Chief Economists Outlook for 2020. The survey concludes that even as the new decade "opens with a fragile growth outlook, social tensions over the evident polarization of economic outcomes and high levels of uncertainty...there are signs of policy agility and business reform that may lead to a different, better kind of economic growth". But, the report argues, "this momentum needs strengthening".
All of these issues and more will be discussed in-depth at the Forum's Annual Meeting in Davos from 21-24 January.
Here are three key sessions to look out for:
- IMF World Economic Outlook Update, Monday 20 January 13:00 - 14:00
- Shaping the Global Growth Agenda, Thursday 23 January 10:30 - 11:15
- Global Economic Outlook, Friday 24 January 10:30 - 11:30
Here are some of the key participants who will address global economic issues:
- Christine Lagarde, President, European Central Bank
- Mark Carney, Governor, Bank of England
- Steve Mnuchin, Secretary, US Treasury Dept.
- Wilbur Ross, Secretary, US Commerce Dept.
- Amy Webb, Professor, NYU Stern School of Business
- Gillian Tett, Editor-at-Large and Chair of the Editorial Board, Financial Times
- Andrew Ross Sorkin, Columnist/Editor, New York Times
- Joseph Stiglitz, Economist, Columbia University
- Mariana Mazzucato, Economist, University College London
- Satya Nadella, CEO, Microsoft