New Kearney GBPC study, Embracing volatility, highlights slowing growth of major engines of the global economy

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Oct 12, 2023, 09:12 ET

Declining growth in the United States, China, and European Union is contributing to broader declines in the level of global output.
Global growth will average 2.6 percent over the 2023–2027 forecast period, falling to just 2.0 percent in 2024.

WASHINGTON, Oct. 12, 2023 /PRNewswire/ -- A new report released today by Kearney's Global Business Policy Council, Embracing volatility, explores the global economic outlook through 2027, including an exploration of five factors that will have an outsized impact in shaping the macroeconomic environment. These factors include rising geopolitical turbulence, economic headwinds caused by climate change and extreme weather, the stickiness of inflation, labor market imbalances, and the role of technology innovation and accessibility.

"There is no question that these forces suggest continued volatility in major economies, with downside implications for global output growth," notes Erik Peterson, managing director of the Global Business Policy Council and co-author of the study. "Yet, this does not mean that businesses should fall into a defensive crouch. On the contrary, we believe that bold and innovative business approaches will be necessary to navigate this uncertainty."

Key points in the study include:

The Asia and Australasia region will continue to be the world's growth engine, with output growth projected to average 4.1 percent through 2027. India will be a driving force of regional expansion, with a projected average growth rate of 7.0 percent.
The United States will remain the world's largest economy through 2027, though China is projected to close the GDP gap from $4.4 trillion to $2.4 trillion.
Weaker commodity prices, slowing growth, and easing supply chain pressures will help inflation recede in most economies. Inflation rates are projected to fall to target levels by the end of 2024 or early 2025.
Unemployment is projected to fall globally, averaging 6.5 percent and leveling out after a peak of 6.7 percent in 2024.
Scenario analysis reflects the level of volatility in the economic outlook, with projections for 2023–2027 global output growth ranging from just 1.2 percent growth in the lowest growth scenario to a high of 3.7 percent in the highest growth scenario.

"Strategic businesses will continue to invest in new ventures, diversify markets, and pursue innovative solutions to contend with economic volatility," adds Terry Toland, manager of thought leadership at the Global Business Policy Council and co-author of the study. "In parallel, they will develop risk preparedness programs. Such efforts can mitigate the impact of the external shocks that are all but certain to shape the economic outlook."

Read the full report here.

About Kearney

Kearney is a leading global management consulting firm. For nearly 100 years, we have been a trusted advisor to C-suites, government bodies, and nonprofit organizations. Our people make us who we are. Driven to be the difference between a big idea and making it happen, we work alongside our clients to regenerate their businesses to create a future that works for everyone.

To learn more about Kearney, please visit https://www.kearney.com/.

About the Global Business Policy Council

The Global Business Policy Council is a specialized foresight and strategic analysis unit within Kearney. Since its first CEO Retreat in 1992, the Council has been a strategic service for the world's top executives, government officials, and business-minded thought leaders. Through exclusive global forums, public-facing thought leadership, and advisory services, the Council helps to decipher sweeping geopolitical, economic, social, and technological changes and their effects on the global business environment. The Council consistently ranks near the top of the University of Pennsylvania's list of best private-sector think tanks.

To learn more about the Global Business Policy Council, visit https://www.kearney.com/business-policy.

Media contact:

Meir Kahtan
Meir Kahtan Public Relations, LLC
+1 917-864-0800
[email protected]

SOURCE Kearney