Don’t count on a soft landing for the world economy – turbulence is ahead | Kenneth Rogoff

Experts seem optimistic but events in China, Europe and the US suggest risks are still tilted to the downside

A month into 2024, the consensus forecast for the global economy remains cautiously optimistic, with most central banks and analysts projecting either a soft landing or potentially no landing at all. Even my colleague Nouriel Roubini, famous for his bearish tilt, regards the worst-case scenarios as the least likely to materialise.

The CEOs and policymakers I spoke to during last month's World Economic Forum (WEF) in Davos echoed this sentiment. The fact that the global economy did not slip into recession in 2023, despite the sharp rise in interest rates, left many experts upbeat about the outlook for 2024. When asked to explain their optimism, they either cited the US economy's better-than-expected performance or predicted that artificial intelligence would catalyse a much-hoped-for productivity surge. As one finance minister remarked, If you are not naturally optimistic, you should not be a finance minister."