Tuesday, 10 December 2024

Review of Predictions For 2024 - Prediction 1 – Global Growth Rises

Prediction 1 – Global Growth Rises


As I write, global growth in 2024 has risen by around 3.2%, according to the IMF, around the same as for 2023, and with a similar figure, forecast for 2025.

That figure, as the IMF indicate, disguises the fact that growth in the world's largest economy, the EU, has continued to be lacklustre, whilst that of the US has been stronger than forecast. That shows the continued subordination of EU imperialism to US imperialism. 

US imperialism has loaded all of the weight of fighting its proxy wars in Ukraine and in the Middle-East on to the EU. It is the EU that has provided large amounts of weapons to Ukraine, and has also, damaged its own economies and profits by boycotting Russian energy supplies, thereby, having to significantly increase its energy costs, by importing higher cost energy, from the US and elsewhere. By the same token, the US, has gained from that process. It is also the EU, and to a lesser extent UK, that have had to take in large numbers of refugees from Ukraine, as well as the continued flow from the Middle-East, resulting from the decades long US-led wars in Iraq, Afghanistan, Syria and Libya, and now intensified by the US-Zionist genocide in Palestine and Lebanon, which alone has displaced several million people.

The global growth figure also disguises a continued slower growth in China, as its policy of deliberately slowing its growth via lockdowns, has proved not so easy to reverse, in the last year, as it already, also, has huge problems caused by the previous liquidity injections that fed into the blowing up of astronomical property bubbles that are now bursting, and causing distortions in its economy, as the ruling Stalinists try to prevent the destruction of this vast fictitious-wealth.

The continuation of Trump's trade war against China, by Biden, over the last four years, and the stepping up of US/NATO imperialism's phoney war against Russia~Chinese imperialism, has further hampered Chinese growth. Faced with a growing threat, China will also have to divert additional resources into its military spending, draining those resources from real capital accumulation, and slowing growth.

However, the development of AI, together with the global shortage of microchips that arose, in the aftermath of lockdowns, has seen a much stronger growth in other Asian economies, based around increased production of semi-conductors. The US-Zionist war in the Middle-East has had an obviously depressing effect on growth in that region, and further proxy wars in Africa have done likewise.

In addition, central banks have continued to reduce liquidity relative to growth of economies, thereby, reducing the levels of inflation produced by the liquidity injections during the period of lockdowns. As, the levels of inflation fell, during 2024, whilst the widely anticipated cuts in central bank interest rates were repeatedly delayed, until the middle of the year, real interest rates, rose.

As the year ends, the build up of debt across the globe, with these higher real interest rates, poses a problem for governments, as they continue to try to govern in the old way, of the last 40 years, based on the delusion of inflated asset prices, and recoil from the need to raise taxes to finance a long overdue rejuvenation of their infrastructure, let alone to finance increased military spending, and the financing of the proxy wars in Ukraine, Middle-East and Africa. The symbol of that is the fall of the Scholtz government in Germany, and of Barnier in France, as well as the attempted imposition of martial law in South Korea.

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