Global economy faces rough weather ahead

Daily squeeze on budgets

Tomas Hnyk, a Prague resident, told China Daily that ordinary people face a daily squeeze on their budgets.

"The costs of energy and food and their basic services increased by a lot more than their income," he said.

Energy prices have surged, especially after the Russia-Ukraine conflict, which cast a long shadow on the continent as no quick ending is seen, he said.

"Prices went up for almost everything," he said. "Despite inflation being smaller than it was, it is still a big issue. For people with less money, it is a huge deal."

This frustration is not only felt in the Czech Republic, but also across other European countries, as they have experienced a wave of protests, with citizens demanding concrete steps from the government to ease their economic burden.

In France, people protested against an increase in the retirement age. In Germany, striking transportation workers caused major disruptions at airports and bus and train stations.

The United Kingdom also witnessed pay disputes across sectors, with workers demanding higher wages. Strikes in schools, railways and hospitals have become more frequent, notably in the National Health Service, where health workers staged the largest strike in its 75-year history. The financial strain intensified as Birmingham and Nottingham declared bankruptcy in September and November, respectively.

Meanwhile, Africa suffers from high inflation, as highlighted in the IMF Regional Economic Outlook for Sub-Saharan Africa published in October, which said: "Inflation is still too high. Inflation at end 2023 is projected to stay in double digits in 14 countries."

In its Economic Outlook published in late November, the Organization for Economic Cooperation and Development said it expected the global economy to slow down slightly in 2024 as a result of the tightening of monetary policy, weaker trade and dipping consumer confidence.

It projected a global GDP growth of 2.9 percent in 2023, followed by a mild slowdown to 2.7 percent in 2024 and a slight improvement to 3 percent in 2025. Asia is expected to continue to account for the bulk of global growth in 2024-25, as it has done this year.

Observers noted a recent trend of de-globalization, spearheaded by the US, resulting in disruptions to global supply chains.

The US and its Western allies "have been the biggest beneficiaries "of world economic integration and globalization since the end of the Cold War, Wang from the Shanghai Academy of Social Sciences said.

However, since former US president Donald Trump assumed office in 2017, a shift toward anti-globalization policies has been evident, initiating trade and technology wars aimed at curbing the ascent of developing countries, Wang said.

"These policies, among others, failed to achieve the 'manufacturing reshoring' advocated by US policymakers, and have increased the operation costs for enterprises. This, in turn, burdens people across the globe, and poses a challenge to the world economic recovery after the pandemic."