• Regina Mayor, Leadership |

A theme that’s become all too familiar in KPMG’s Global Economic Outlook is uncertainty. For many, 2023 was another year when the medicine at times felt worse than the illness. Central banks tightened their belts with tough monetary policies aimed at reigning in spiralling inflation. It appears to have paid off, but at the cost of economic stagnation for many regions and a continued squeeze on consumer spending.

KPMG’s latest Global Economic Outlook offers a sense of what lies ahead, with the clear health warning once again that we’re in deeply uncertain times, and therefore our predictions are just that – a forecast based on the few certainties that exist right now and the long-term trends that can help us piece together a complex future.

I spent the final month of 2023 in Dubai, joining delegates at COP28. The summit was focused on the climate crisis and potential solutions that could unlock a more sustainable future, but – for me – it reflected some of the wider challenges facing economies and political leaders right now. There were some positive outcomes, but many issues remained unresolved. The economic outlook is worryingly similar.

In our latest report, our economists based around the world, offer their view on the economic landscape in the coming months and years. While the story varies from country to country, there are some clear universal themes. Monetary policy has had a big impact on output and growth prospects and there’s growing pressure for it to ease. Whether that happens remains to be seen. Many central banks are stuck between a rock and a hard place, cautious that loosening the screws could simply lead to an inflationary rebound.

There are also fears that an increasingly protectionist, de-globalization approach in politics is impacting supply chains and the traditional trade flows that have sustained many economies. An interesting side effect – and something to watch in 2024 – is some of the beneficiaries like Mexico and Vietnam, who are embracing the opportunities to fill the space left by shifting trade relationships.

While we’re anticipating no significant change to employment figures, 2024 could be a year to monitor the impact of tight economic conditions for the corporate world. A wave of debt refinancing in a particularly challenging period could put real pressure on business leaders searching for an end to the prolonged pain of recent months. Combined with ongoing geopolitical uncertainty, the coming year could be crippling for many.

While the latest KPMG Global Economic Outlook is unquestionably skewed toward a negative forecast, there are always glimmers of hope and optimism. Since the outbreak of the pandemic, we’ve had several years of uncertainty and business leaders have demonstrated a real sense of resilience and agility. With the right strategies in place and an ability to flex to an ever-changing world, the most innovative and focused should eventually start to see some light at the end of the long tunnel.

Regina Mayor, Global Head of Clients & Markets, KPMG International