Business
THE Lagos Chamber of Commerce and Industry (LCCI) has projected that global economic outlook would be driven by factors such as the U.S. elections and increasing competition in global geo-political environment.
The President of LCCI, Mr Gabriel Idahosa, made the projection at the LCCI State of the Economy quarterly news conference on Thursday in Lagos.
He noted that in the third quarter of 2024, the global economy remained resilient and inflation continued to moderate, mainly in advanced economies.
Idahosa said that the growth outlook was stabilising, though vulnerabilities persisted.
He added that while easing inflation and resilient global trade offered some optimism, public debt levels in advanced and developing economies might threaten long-term stability.
The LCCI president said the forthcoming U.S. elections were driving uncertainty over the direction of U.S. foreign policy.
He said that the diffusion of global power and uncertainty over the direction of U.S. foreign policy underpinned the rise in geo-political risk.
He added that the global geo-political environment was characterised by increasing competition.
Idahosa said the ongoing conflict in Gaza would preserve the risk of a wider regional war in the Middle East and the persistent Russia-Ukraine war—now in its third year.
He said that flashpoints in Asia, such as the South China Sea and Taiwan, threatened U.S.-China relations.
“In spite of headwinds from conflict and high interest rates, we do not believe the global economy is at significant risk of recession over the next 12 months.
“While we believe that the worst of the cost-of-living crisis is over, inflation is not projected to return to the low trend of the pre-pandemic era.
“Elevated government bond yields mean that the space to pursue fiscal expansion will be constrained in most cases.
“Debt-servicing costs will absorb more significant portions of budgets, and defence, healthcare, and industry policy will be areas of spending priority,” he said.
Idahosa said that in the context, revenue-raising measures were likely, given that the appetite to implement spending cuts would generally be limited.
He also projected that climate change impacts would drive huge financing concerns with advanced economies doing more with green transition spending.
According to him, poorer countries will be disproportionately affected by climate change.
He said that poorer countries would struggle to secure financing to mitigate climate change impacts, especially as advanced economies might be less supportive of global mitigation efforts due to huge spending on climate-driven disasters in their countries.
“A most recent example is the need for $50 billion to clean up the State of Florida in the United States after the devastating effect of Hurricane Milton, just last week.
“Attitudes toward immigration may harden in North America and Europe as challenging conditions in many parts of the world encourage more people to seek economic opportunities elsewhere.
“Migration policies will continue determining votes in elections as global economic situations seep into politics.
“In the long run, this may impact diaspora remittances to less developed countries,” he said. (NAN)
A.I
Oct. 18, 2024
Tags: LCCI Mr Gabriel Idahosa
