Recession fears recede, but inflation's still a big risk - 3 chief economists on the global outlook

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Gregory Daco, Chief Economist, EY-Parthenon: We are in a global environment that is highly uncertain and a lot of business leaders are uncertain as to the economic outlook.

Robin Pomeroy, host, Radio Davos: Welcome to Radio Davos, the podcast from the World Economic Forum that looks at the biggest challenges and how we might solve them. This week: it has a direct impact on every one of us, but do you know what’s happening in the global economy? We speak to three of world’s smartest chief economists. And you know what? Perhaps the glass is half full

Razia Khan, Razia Khan, Chief Economist. Standard Chartered.: On a global growth level, there seems to be good news and more good news to some extent.

Robin Pomeroy: Maybe we are not heading for a global recession after all.

Razia Khan: If we look at recent data out of Europe, the fears of a really deep recession over the winter, the energy crisis, a slowing of growth - that seems to have been somewhat unfounded. Europe has been more resilient than initially believed.

Robin Pomeroy: But inflation remains a big risk.

Jorge Sicilia, Chief Economist, BBVA Group: The long-term consequences of this very negative impact of inflation go beyond the short term. That is why it's very important to have central banks focused on that.

Robin Pomeroy: But what impact will central banks’ tightening have back on the economy?

Gregory Daco: Credit is really the grease that oils the system. Without much credit growth, you're going to see slower consumer spending activity, slower business investment activity and less investment activity overall, which will constrain growth for the global economy.

Robin Pomeroy: Subscribe to Radio Davos wherever you get your podcasts, or visit wef.ch/podcasts.

I’m Robin Pomeroy at the World Economic Forum, and as three wise economists help us understand the global economic outlook…

Razia Khan: The good news is that we could find out which world we're living in as soon as the second half of this year.

Robin Pomeroy: This is Radio Davos

The World Economic Forum just hosted a Growth Summit where experts met to talk about the global economic uncertainties and the outlook for jobs. You can listen back to the three episodes we did on that here on Radio Davos.

On this episode, we return to try to read the tea leaves of the global economy. At the Growth Summit I interviewed three chief economists. Later in the episode you will hear Razia Khan from Standard Chartered Bank and Gregory Daco from EY-Parthenon.

But we start with the views of Jorge Sicilia from Spanish multinational BBVA. And I started by asking Jorge what he sees as the main headwinds in the global economy.

Jorge Sicilia: First of all, in the very short term, what is the outlook for inflation? And as a consequence of that, what are the interest rates that central banks are going to need to engineer to bring inflation down, on the one hand, and on the second hand, the impact of the geopolitical environment on some of these trends.

Robin Pomeroy: And is the feeling among chief economists that the actions that central banks have been taking are now slowing down or will go into reverse, that this monetary tightening is over?

Jorge Sicilia: So among economists, there is the feeling that probably the the peak of interest rates is near and perhaps more clearly so in the US than in Europe. And certainly in emerging Latin America they have gone already significantly a long way, not so much in Asia. So it depends on the region. But more or less the answer would be yes.

There is more uncertainty when I discuss with other colleagues as regards whether interest rates are going to come down or remain high for a longer period of time.

Robin Pomeroy: And what about inflation? Has that peaked and will prices now stabilise, do you think?

Jorge Sicilia: So inflation has increased dramatically as a consequence of many elements related both to supply side shocks but also to high demand, mainly fiscal policy that was implemented during and after the pandemic. So we have supply and demand issues.

What we are seeing now is the year-on-year rate decline of base effects that are feeding their way through the economy but still core inflation, and clearly services inflation, remains very high. And there is more uncertainty as regards how quickly it's going to come down in the near future.

Robin Pomeroy: What about the geopolitical aspect then? What are the geopolitical tensions that chief economists are looking at?

Jorge Sicilia: The main point that I would make about geopolitics is that we have lived during 30 years in a world where globalisation has increased dramatically. This has had some negative consequence. You can think in terms of the excess liquidity and the global financial crisis. You can think in terms of inequality.

But there is one thing that globalisation has kept relatively low and it's firms looking for the best way of increasing production and making it more efficient. And that has generated an environment where inflation has been very, very low across the board, mainly due to goods inflation, and that has allowed a very long period of time in which inflation was not in the radar of any agent.

Now, depending on which type of globalisation or deglobalisation you think is going to come, you're going to see different effects. But in any case there's going to be a more challenging environment for inflation - on the one hand, because you're not going to be able to react quickly to shocks, increasing production in any part of the world, which typically works unless you have a big global shock like the COVID shock. And second, given that there is a tendency to build resiliency in global value chains, this is probably going to make that countries are going to steer investment that might not be needed should you be able to use the global production force. And that means more inflation.

Robin Pomeroy: Is deglobalisation happening or are people just cautious that it might happen due to the US-China rivalry, presumably most importantly.

Jorge Sicilia: So when you look at the data, what you at least see is that there is a stop in the process of globalisation and then you have to look in detail into different arrays of data and you might get different conclusions in terms of whether there is some trend to deglobalisation or sort of some trend to regionalisation.

But in any case, what I think is for sure happening is that the process of high globalisation has stopped for quite some time.

Robin Pomeroy: In your view, is that a good thing or a bad thing?

Jorge Sicilia: There are negative consequences of globalisation, but that were probably related to mismanagement within countries of the consequence of globalisation.

So take inequality. In this process of high globalisation period, you have had 15 years in which inequality has declined worldwide but has increased within countries. So the overall impact of globalisation has been positive worldwide for inequality, but negatively within countries. That is not necessarily a bad consequence of globalisation, but a bad management of the consequences of globalisation within countries.

Stopping globalisation I think, is going to have negative consequences. Stopping a little bit to think how to deal with globalisation within countries might be a benefit of the process, but we need to deal with it adequately.

Robin Pomeroy: And we have the cost of living crisis with this inflation. Even if inflation peaks and levels off or goes down a bit, we still have much, much higher prices. in Western economies I'm thinking, with wages that haven't kept up. What do you see the consequence of that?

Jorge Sicilia: Negative. It's very clear.

We have forgotten over 20 years in developed economies what are the problems of high inflation. It's something that it is reminded every day in emerging economies and that it basically attacks more to those that are in the lower end of the income distribution. And that has very negative consequences for the fabric of the societies in which that happens. It also reduces the ability of those people to acquiring skills because they have to, in some cases, face the problem of income that might affect the ability to have a good education for their kids, a good health environment.

So the long-term consequences of this very negative impact of inflation go beyond the short term. That is why it's very important, one, to bring inflation down as quickly as possible and to have central banks focused on on that, and, two, having governments dealing with this problem, but with very targeted policies that are able to alleviate a little bit the the problems of high inflation in low-income families without having expansionary fiscal policies that would make life much more difficult for central banks to reduce inflation.

It's a tricky thing to achieve because you do need very detailed data on households and firms to be able to apply targeted policies. My main concern here is that we have not advanced much in the process of being able to gather that data, to being able to implement targeted policies for quite some time. And inflation has been relatively high for quite some time. So I think that governments are losing time here.

Robin Pomeroy: Do you have any concerns around the world about unemployment? Because so far that doesn't seem to have been a major problem, certainly in developed economies. But if there were recessions starting, economic slowdowns, do you think unemployment might rear up in the way that inflation has reared up in the last year or so?

Jorge Sicilia: On the one hand, it is true that across the board the unemployment rate has not increased as much as one would have thought one year ago or one year and a half ago. So that's a good thing. But at the same time, there are a few things that are not working in the in the labour market.

So in the US you have these COVID scars and still the labour force participation has not recovered as much. This is not the case in in Europe, but in emerging economies what you are seeing, and sometimes in developed economies as well, is an increase in informal employment, and that is also a problem in terms of generating the environment in which you can invest in people, thus increasing their skills for the new type of jobs that are going to be required.

And this is the main challenge that we have long term, is to make sure that the labour force has sufficient skills to adapt to this innovation that is that is happening.

Robin Pomeroy: How do you see global growth? Or maybe we should say, how do you see US growth? Because maybe if the US goes into recession, that's going to affect the rest of the world. Where do you think we're at in terms of GDP?

Jorge Sicilia: Until now, growth has been very resilient across the board and the big question is whether this resilience shows that there is an underlying strength in the economy or whether you're having some elements or buffers that are helping the economies out.

And that means, in the case of the US or even Europe, whether there is a large excess savings accumulated during the pandemic that are still able to generate sufficient income for families to continue spending. That has been one big explanation of why the economy has been resilient. Now the issue is, if this stops consumption is not going to continue supporting the US economy as before.

The second is how far interest rates are going to need to go up in order to kerb inflation.

And the third one, which is - everything is somehow related - but the third one is whether what we are seeing in financial markets in the US and in parts of the banking sector in the US, in a sense is something that eventually is going to make some banks, especially the regional banks, cut a little bit lending in order to protect their balance sheets. And if that is the case, maybe this support in terms of credit, both for investment and for consumption, is going to be low.

Now, the way we see it is that what we're going to have in the US is a recession, a mild recession, unless the financial sector stress continues to increase. And to be honest, we don't, for now, see vulnerabilities that would lead us to think that that recession is going to be different than a normal cycle. And that means that recovery is likely to come afterwards when inflation comes down and interest rates are able, real interest rates, are able to be a little bit lower.

Robin Pomeroy: Jorge Sicilia Chief Economist of BBVA Group. Our second chief economist comes from London-based Standard Chartered. Razia Khan is their Chief Economist & Head of Research for Middle East & Africa.

Razia Khan: So the one big concern that most economists will have had going into 2023 is we've obviously seen a very rapid pace of tightening in developed markets. And as we all know, this follows years of very accommodative policy.

What is the impact of this going to be? There had been significant fears - now fading somewhat given the relatively favourable performance of Europe - but there have been fears that the pace of tightening doesn't go without growth risks. So far, the growth picture has held up well.

But the concern that markets will have, especially as we start to get more US economic data, that a slowdown is on its way, this is unlikely to go away.

And of course, the bigger question is what about the more vulnerable economies globally? What about those emerging markets and frontier economies that are dependent on capital flows from elsewhere if we continue to see these very, very difficult credit conditions persisting.

Now, on a global growth level, there seems to be good news and more good news to some extent, in that if we look at recent data out of Europe, the fears of a really deep recession over the winter, the energy crisis, a slowing of growth - that seems to have been somewhat unfounded. Europe has been more resilient than initially believed.

And provided we see only a very shallow slowdown in developed markets, the focus for many will shift to China's recovery, which we at Standard Chartered think will start to be more pronounced in the second half of the year.

Now, we know that a lot of it is base-effect driven. Last year was a COVID impacted year for China. With the reopening of the economy and the scale that we've seen, there's bound to be a pronounced base effect driving growth, even if nothing else changes.

China bears worry about the shift in China's own growth focus. The hope that the authorities have is that consumption drives a much greater amount of the growth going forward than investment had traditionally done.

And of course, for many emerging markets that benefited traditionally from China's big investment drive, the key question is, are they going to be seeing the same growth benefits that they might have taken for granted in the past.

At Standard Chartered we're still relatively upbeat on growth.

Asia, for example, doesn't have the significant headwinds that some of the weaker, more vulnerable economies seem to have. Asian economies, especially those with current account surpluses, will do well and will do even better given China's reopening. The Middle East with the GCC oil producers is another region where growth continues to be robust, notwithstanding the recent voluntary OPEC production cuts.

We think that a lot of the focus in the recent past has been on reform, what's happening in the non-oil economy, and that will continue to drive growth on a persistent basis for some time.

There are, of course, areas of vulnerability. For the more fragile economies and those greatly dependent on foreign financing of their needs, whether that's financing of a current account deficit, whether that's the ease of refinancing existing debt obligations, the road ahead does seem a lot bumpier, and this is where there will be a need for the real adoption of reform to try to sustain any kind of growth recovery.

So it is a mixed picture overall.

To go back to your question on the global growth outlook, there's no question that concerns around a global slowdown do dominate. From the perspective of China's economic recovery, good prospects in Asia, good prospects in the GCC. There is reason to be somewhat more upbeat.

Robin Pomeroy: Looking at Africa, the main concern would be for developing countries with a large debt level. Is that an area where they should be concerned about growth?

Razia Khan: Even before the recent tightening of global financial conditions, none of us could have foreseen the kind of inflation shock that we've seen taking place in developed markets. The pace of developed market central bank tightening, very rapid removal of that accommodation.

There had always been concern, given the degree of borrowing for many sub-Saharan African economies, that ten years down the line from QE, we would see these wall of maturities and there were always questions around how easily that would be refinanced if every country were looking to refinance at the same time.

Nobody imagined that we would see a quick succession of external shocks: the emerging market shocks of 2018, the COVID crisis in 2020, in 2022 Russia-Ukraine compounding some of those inflationary issues. And many sub-Saharan African countries simply finding themselves locked out of international capital markets entirely.

Now, we know that some countries, Zambia being a key example, Ghana, have sought a common framework debt restructuring. The hope is that they can deal with their external debt issues in a way that resolves it as quickly as possible. This is still being tested to some extent.

For other countries, there will certainly be a need for more concessional financing, for more official funding to these economies, given that they're very unlikely to get all of the financing that they need from private capital flows alone.

So in terms of the impact of all of that on growth, the outlook for Africa is somewhat uncertain. It's a mixed picture.

On the one hand, Nigeria, the largest economy, has recently seen elections, an incoming government that is promising key reforms with fuel subsidy removal, with foreign exchange liberalisation. This could help boost investor sentiment and also help boost growth over the medium term.

But there is the very real concern that given how difficult external financing conditions are, the key issue for many different sub-Saharan African sovereigns is how they refinance their debt obligations in a comfortable way. Is it going to be possible? Are we going to see a liquidity crisis turn into a solvency crisis? Can the IFIs, the international financial institutions, really step up and do what they need to do in terms of support in the interim? These are still unanswered questions.

Robin Pomeroy: What about the impact of conflicts? We obviously saw the Ukraine war and the impact that had on food bills for countries that import food. Is that still a concern? And what about the tensions or the conflict in Sudan? Is that having or likely to have impact beyond its borders?

Razia Khan: So this is an area of very grave concern.

First of all, on food inflation. In the West, we take it for granted that we've seen global food inflation peak. There was the impact of Russia and Ukraine, it's now contributing to the base, food prices coming off, fertiliser prices are down, energy prices are down, and this will hopefully be more supportive of growth.

For many African countries it's been entirely different. There have been foreign exchange vulnerabilities that have compounded that initial food price crisis. We know that across much of Africa, food dominates consumption baskets. In sub-Saharan Africa, it's typically about 40% of consumer baskets. But even in some North African countries, there are very key vulnerabilities, ongoing vulnerabilities, given the dependence on Russia, Ukraine as a source of grain.

But looking at the geopolitical risks, whenever we see an increase in food prices, there is an associated concern that this could bring about a great deal of social instability.

Now, looking at the conflict in Sudan, there's a classic example of a weak state that tried to form a democratic government that was very short lived. And now it's all escalated into a live conflict that has significant implications for the very many countries that border Sudan. We should not forget, while Sudan doesn't often tend to be on the international radar, that instability in such a large geographic area could have implications for all of the neighbours. Only last year we were seeing the conflict in Ethiopia. Even that situation is not fully resolved. So this certainly needs to have a lot of attention focused to it. Still very difficult outlook.

Robin Pomeroy: And will those risks be reduced if the monetary tightening in the West is eased?

Razia Khan: Well, this is the big hope.

Markets in the US are already pricing in the likelihood of Fed easing. And the concern is that this may not necessarily lend itself to risk-seeking conditions in the first instance.

There are two parts to this. It could be that we see a slowing in inflation on its own accord. We don't see that much of a slowdown in the US. It looks as though the slowdown in inflation can be comfortably achieved. And that would be a best case scenario, most likely preserving flows to emerging markets, initially on a selective basis, but eventually transforming into something far more risk-on.

The risk, however, is that we start to see the markets' assessments of how much Fed tightening is still needed changing on the basis of a perceptible slowdown in the US economy. And if what we start to see is the concern about regional bank lending precipitating into a sharper slowdown than had been anticipated, that is a risk-off environment. That has rarely lent itself to risk taking in emerging markets, even if they might have sound growth prospects.

And this is the uncertainty that we face right now. It could be that we're approaching the end of the Fed's tightening cycle. At Standard Chartered we certainly think so. But the key question going forward is what is going to be driving Fed easing? Is it going to be a sharp slowdown in the economy? If that's the case, it could be a while before we see more risk taking and capital flows to emerging markets more broadly. Or is it just going to be that we live in a good world where inflation is off its highs, the Fed can be comfortable, policy has done its work and growth hasn't fallen off a cliff.

So these are factors that are going to be watched very carefully.

Robin Pomeroy: When do you think this period of uncertainty will be over?

Razia Khan: The good news is that we could find out which world we're living in as soon as the second half of this year. And if for the sake of argument, if we start to see China's recovery deepen, if the concerns around how imbalanced prior China growth was don't tend to dominate and in fact, we see a recovery where China's consumption is coming up in a healthy way and a slowdown in investment can be achieved in a way that doesn't pose risks to global growth, that would be a good scenario.

So there's a lot to observe in the second half of the year: the health of China's recovery, the ability to strike a more balanced, sustainable course, which will be important to many economies globally. And of course, in developed markets, in the US in particular, the ability to steer inflation down to much more comfortable levels without putting growth at risk.

We should have better answers in the second half of this year.

Robin Pomeroy: Razia Khan, chief economist at Standard Chartered. Our third and final take on the global economy is Gregory Daco from Ernst & Young's global strategy consulting arm EY-Parthenon.

Gregory Daco: We are in a global environment that is highly uncertain and a lot of business leaders are uncertain as to the economic outlook.

What we are seeing is a slowdown in final demand. We're seeing signs that global economic activity is gradually slowing. But there is no major retrenchment in terms of the overall state of the global economy.

There are, that being said, a number of risks. We still have elevated inflation and we still have central banks that are looking to tighten monetary policy in this high inflation environment. So a number of sectors that are interest rate sensitive are quite exposed to this higher interest rate environment.

Robin Pomeroy: What kind of sectors are you most exposed?

Gregory Daco: Well, the sectors that are most traditionally exposed to higher interest rates are the real estate sector, of course, And we've seen some economies around the world face significant downfalls in housing activity, the US being a prime example.

Encouragingly, though, we've seen that the amount of leverage that has backed the housing sector over the past ten years is much less than was the case during the 07/08 crisis. So that's a positive development on the household sector front.

That being said, there are still concerns around the commercial real estate side. There are not just an environment where there is lower demand structurally, but also an environment where cyclically we have to adjust to a higher cost of capital environment.

And other sectors that are also exposed are the banking sector, mutual funds, pension funds that have this duration mismatch between what they owe and what they have in terms of assets.

Robin Pomeroty: Talking of the banking sector then. Do you think this crisis that brought down a couple of banks is over or is there still a risk that that could continue?

Gregory Daco: Well, I don't think it was really a crisis per se. It was an environment of elevated turmoil. And I think we're not past that turmoil. We're still in an environment where financial institutions have to adapt to this higher cost of capital environment. And that's not just going to go away overnight.

We continue to see downward pressure on smaller regional banks in the US. The high level of fragmentation in the US banking system is of course a key concern. And I think it will still take some time before we see the end of the turmoil on the banking sector front.

What's very encouraging is that so far we have not seen broad based contagion across all of the banks in the US. Nor have we seen global contagion. We've seen some tremors across Europe, but no major global contagion environment. And that's positive.

Still, there's going to be some consequences for the broader global economy, which are going to come in the form of a tighter environment for credit. And we know that credit is really the grease that oils the system. And without much credit growth, you're going to see slower consumer spending activity. You're going to see slower business investment activity and you're likely going to see a little bit less investment activity overall, which will constrain growth for the global economy.

Robin Pomeroy: When you were last on this podcast, you were talking about the risks of stagflation and you explained that term. Is that still a risk, do you think?

Gregory Daco: Well, I think we have to be careful in how we use the word stagflation. The real definition of stagflation is essentially stagnation on the growth front, so no growth or even a contraction in economic activity, and high inflation. I don't think we're headed for that type of environment.

There are certainly hints that may sound stagflationary because we're seeing slower growth and still elevated inflation. But if you look at the flow of economic activity, what you're seeing is that we're past peak inflation across most places around the world. We're seeing disinflation. So inflation is falling, Prices are still rising, but they're rising at a slower clip. And we have an environment where we have slower growth.

I would anticipate that if we continue to see slower growth and if we see some potential recessions across the world, that will put downward pressure on inflation and potentially in some sectors lead to outright deflation, so where prices are falling.

So I don't really think that we are at risk of a stagflation area environment in the purest sense of the term. But we are certainly seeing some hints of an environment right now of slower growth and still elevated inflation.

Robin Pomeroty: What about the risk of unemployment? So far, as you've mentioned, coming out of COVID there's been a tight labour market, but if there is a downturn in a big economy, there is a risk of increased unemployment, isn't there? Also a lot of people here are talking about AI, you know, 'the machines coming for our jobs'. Do you see any risk either globally or in particular regions of unemployment, after inflation reared up, maybe unemployment will be the next thing to happen?

Gregory Daco: I think that's certainly a risk. But we have to distinguish the cyclical factors from the structural factors.

On the cyclical side, we are seeing a slowdown in economic activity, but businesses, as I mentioned, are eager not to let go of their workforce too rapidly because they struggle to get the right size of talent pool into the doors over the last couple of years, so they are much more cautious.

That being said, oftentimes recessions are non-linear. We have a sudden shift in the economic environment that leads businesses and consumers to retrench more rapidly.

So while the unemployment rate across a number of economies around the world is at historic lows, we still have this risk that it could start to rise and fairly rapidly once it gets under way.

Now, on the structural side of the labour force, we have an environment where most of the labour force across the world is ageing. So supply has become an increasing concern and that supply of labour is not going to be increasing rapidly over the next 5 to 10 years.

So where businesses are increasingly focused is on driving up the productivity of that pool of talent and that comes gradually over time.

But it is certainly a concern that a lot of businesses have in terms of ensuring that their talent pool is as productive, as efficient as possible, because that alleviates the supply shortage, while also mitigating the pressure on the cost front in terms of labour.

Robin Pomeroy: Where do we stand in terms of globalisation or deglobalisation? Where are you seeing things now and where are we going with that?

Gregory Daco: I think what we are seeing is a slower pace of globalisation and a major risk that we enter a world that is increasingly fragmented.

What we've seen is not a deglobalisation environment where we've gone into reverse, but we've seen policies that are being put in place across a number of countries that are increasingly focused on the domestic economy and on this idea of friend-shoring, essentially trading with traditional trade partners, and distancing oneself from other partners, other potential trade partners.

In that type of environment where industrial policy takes a greater role, that generally tends to weigh on economic activity because you're losing some of the potential advantages of trading with other partners and you're implicitly increasing the cost of doing trade globally.

So in an environment where inflation has been a key constraint on economic activity, if anything, we should be looking at alternatives that continue to put downward pressure on costs.

Because one of the key things that we tend to forget when we look at short-term inflation dynamics is that over the past ten or 15 years, there was a significant downward pressure on goods prices to the order of 2-3% on an annual basis. That was limiting the upside to overall inflation. If we don't have as much gain from globalisation as we had in the past, and let's assume that goods prices are flat going forward, that would tend to put, all else equal, a 0.3 to 0.4 percentage points boost to inflation, pushing inflation higher. And that could become an increasing concern and constraint on economic activity.

So this theme of globalisation is very important and fragmentation can have significant risks in terms of output and inflation.

Robin Pomeroy: But is that a price governments are willing to pay, I wonder.

Gregory Daco: I'm not sure. We are in an environment where there is this increased desire to ensure long-term growth, and in this environment where essentially supply is increasingly constrained on the goods front, on the labour front, we don't really want to have additional pressures when it comes to inflationary dynamics.

Unfortunately, a lot of governments are increasingly focused on developing their domestic economy. And you've seen across a number of large economies this increased push for industrial policy - producing more at home versus abroad.

There has to be a realisation that this world will continue to be interconnected and that there are a lot of benefits to producing for the final market close to the final market. And if that is a domestic market that does not need necessarily to be within the domestic market, it can be close by, in areas that offer a combination of lower cost, higher productivity and closeness of transportation, because we know that supply chains are at risk in this environment where we've seen a significant number of consecutive supply shocks.

Robin Pomeroy: Gregory Daco, chief economist at EY-Parthenon was speaking to me last week at the World Economic Forum’s Growth Summit in Geneva, as were the other guests you heard here, Jorge Sicilia of BBVA and Razia Khan of Standard Chartered.

Do listen back to our coverage of the Growth Summit, including an interview with Christian Keller, the Head of Economic Research at Barclays, talking about the World Economic Forum’s latest Chief Economists Outlook which you can read on our website weforum.org.

Please subscribe to Radio Davos wherever you get your podcasts and please leave us a rating or review. And join the conversation on the World Economic Forum Podcast club - look for that on Facebook.

This episode of Radio Davos was presented by me, Robin Pomeroy. Editing was by Jere Johansson. Studio production was by Gareth Nolan.

We’ll be back next week with something a little different - and here’s a sneak peak: