2024 Economic Conditions Outlook: Global Respondents Concerned About Geopolitical Instability and Conflicts

Global respondents are expressing concerns about the persistence of geopolitical instability and conflicts well into 2024, according to the latest McKinsey Global Survey on economic conditions. The survey reveals that geopolitical instability is seen as a top threat to economic growth by the largest percentages recorded all year. While respondents maintain a positive view of their own economies, worries about political transitions and geopolitics have increased. However, optimism about the global economy, workforce growth, and profits has slightly decreased.

Geopolitical concerns are cited by 67 percent of respondents as a top threat to global economic growth, marking the largest share since March 2022. Respondents are more likely to see geopolitical instability as a risk to growth compared to previous quarters. On the other hand, fears about inflation as a risk to global growth have receded. The interest rate environment is also seen as less risky, with fewer respondents expecting interest rate increases.

The survey also highlights a divide in global sentiment, with respondents in Greater China more positive about the state of the world economy compared to their peers in other regions. Overall, respondents’ global outlook remains positive, but not as optimistic as it was six months ago. Concerns about political transitions and domestic political conflicts have risen, while interest rate concerns have decreased.

In terms of company outlook, respondents remain cautiously optimistic, with a majority expecting profits to increase in the coming months. Demand for companies’ offerings is also expected to grow, especially in certain sectors like healthcare, technology, and energy. Geopolitical conflicts remain a top threat to company growth, while supply chain disruptions are cited less frequently.

Overall, the survey indicates a mix of positive and cautious sentiment among global executives, with concerns about geopolitical instability, inflation, and political transitions overshadowing other risks to economic growth. As the year progresses, executives are keeping a close eye on these factors while remaining hopeful about the future of their economies and companies.