Adapting To A Shifting Investment Landscape:

HARNESSING NEW POTENTIAL FOR GLOBAL ECONOMIC DEVELOPMENT

The current state of the global economy is experiencing a signi cant decelera on in growth, primarily a ributed to reduced investment, disrup ons caused by the geopoli cal tensions, high in a on rates, and elevated interest rates that have raised the cost of borrowing. Developing and weak economies are par cularly vulnerable to the impact of higher interest rates, as it has led to a decrease in priority investments and an increase in debt costs. This has raised concerns of an impending global economic recession, par cularly in light of the current geopoli cal tensions. And experiencing two consecu ve recessions within the same decade is not a normal phenomenon.

Moreover, the growth forecast for 2023-2024 remains low, and it is unlikely that the situa on will improve un l the end of 2024. Although the global economy is projected to grow by 1.7% this year and 2.7% in 2024, the gross investment in emerging markets and developing economies is expected to increase by just 3.5% over the 2022-2024 period. This rate is less than half the rate that was observed in the previous two decades.

“The crisis facing development is intensifying as the global growth outlook deteriorates,” said World Bank Group President David

Malpass.“Emerging and developing countries are facing a mul -year period of slow growth driven by heavy debt burdens and weak investment as global capital is absorbed by advanced economies faced with extremely high government debt levels and rising interest rates. Weakness in growth and business investment will compound the already-devasta ng reversals in educa on, health, poverty, and infrastructure and the increasing demands from climate change.”

Despite lingering threats, the global economy shows some signs of resilience, partly due to the low prices of energy. Trade and investment policies are shi ing away from mul lateral coopera on towards regional and bilateral solu ons. This is one of the strategies adopted recently by global business actors in order to boost and ac vate the global investment wheel. Furthermore, innova on  nancing programmes worldwide are shi ing from a volume-driven to a value-driven approach. As a result, all new economical strategies work on enhancing new ideas, such as the general shi  in na onal economic policymaking through new industrial policies, which include protec onism in numerous countries.

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