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Mohamed El-Erian

Upbeat predictions for global economy are not cause for optimism

The main concern is that too many policymakers seem more focused on reinvigorating inefficient growth engines than shifting towards more sustainable, forward-looking models.

Mohamed El-ErianGlobal financial commentator

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In the run-up to 2023, the outlook for the global economy appeared bleak. Analysts predicted that Russia’s invasion of Ukraine and the subsequent surge in energy prices would trigger a significant economic downturn in Europe. Bloomberg Economics proclaimed there was a 100 per cent probability that the United States would suffer a recession. Few believed that most developing economies could withstand the combination of rising energy prices, soaring interest rates and a downturn in developed countries.

Had forecasters anticipated the war between Israel and Hamas and its potential for regional escalation, the intensification of the Russia-Ukraine war, and political turbulence in some Western countries, their pessimism would have been even more pronounced.

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Project Syndicate

Mohamed A. El-Erian, is president of Queens’ College at the University of Cambridge and a professor at the Wharton School of the University of Pennsylvania

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    Original URL: https://www.afr.com/policy/economy/upbeat-predictions-for-global-economy-are-not-cause-for-optimism-20231203-p5eolb