Financial Times writers’ predictions for the world in 2024

An FT writer says that with inflation sinking and rate cuts on the horizon, bonds seem a safer bet than they were in 2023. Photo / 123RF

Written by: Financial Times writers

OPINION

The Financial Times’ team of crystal-ball gazers had their best year for a while in 2023, with only three wrong answers — though we got these pretty wrong.

The S&P 500 did not fall by more than 10 per cent, but climbed over 20 per cent (though driven mostly by just seven tech stocks). Europe didn’t experience blackouts, though we said this would happen only in a very cold winter (it wasn’t). And there wasn’t a string of defaults in Africa, though Ethiopia did default this week.

It says much about the world that, for a third year running, we feature questions on war or military action this year — between Israel and Hamas, Russia and Ukraine, and, perhaps, between China and Taiwan. The big calls seem ever harder to make.

But on the question more FT staff suggested than any other — will Donald Trump be president? — Edward Luce agreed to venture his best guess. Read on to find out!

Will Donald Trump become US president again?

No. But — assuming the recent legal hurdles thrown up against Trump standing in Colorado and Maine are overcome — his campaign against Joe Biden will be the nastiest presidential election in US history.

It will be very close run. Trump will be criminally convicted in at least one of his four trials, probably two, before the election, and will present it as political persecution by the “Biden crime family”. Though visibly ageing, Biden will squeak through, more because a narrow majority will be rejecting Trump than endorsing a Biden second term. Edward Luce

Will 2024 surpass 2023 as the hottest year on record?

Yes. The year 2023 was marked by so many scorching heat extremes that it will almost certainly prove to be the hottest in 174 years of climate records, once the final numbers are in.

But many scientists expect 2024 to be even warmer, because the 2023 heat was bolstered by the emergence of a naturally occurring El Nino climate pattern. This typically has the biggest effect on global temperatures after it peaks — which may not happen until January 2024. Pilita Clark

Will the Israel-Hamas war trigger a full-blown regional conflict?

No. The war has sparked violence across the region involving Iranian-backed militant groups. The biggest concern is that border clashes between Hezbollah, the powerful Lebanese movement, and Israeli forces spiral into a full-blown conflict between the two.

Benjamin Netanyahu’s Government has been clear it can no longer live with Hezbollah fighters camped on the Lebanon-Israel border, but the hope is that diplomatic pressure contains the situation.

Neither Washington nor Tehran want a broader regional conflict, even if fighting between Hezbollah and Israel intensifies, but the situation is alarmingly volatile. Andrew England

Will the US achieve a soft landing?

Yes, in the short term. Inflation has drifted down in a manner that has surprised even the Federal Reserve this year, and growth has remained stronger than most economists expected.

Since consumer spending remains robust and wage growth (fairly) well contained, a soft landing could continue for several months. But don’t bet on it lasting throughout 2024. There will be less fiscal support, as Covid-era handouts to households have been consumed.

Higher interest rates are sparking bankruptcies, US debt worries are rising and geopolitical stresses are fracturing global trade. That could raise inflation and slow growth. So within a year, the landing will probably become more painful. Gillian Tett

Will Keir Starmer become UK prime minister?

Yes, though it is possible the UK election does not happen until January 2025. Rishi Sunak’s Conservatives look divided and exhausted.

The number of seats the Labour opposition must win means it could land anywhere between a minority government and the landslide to which opinion polls currently point. But it is extremely hard to see how the prime minister can recover enough support to hold on to power. Robert Shrimsley

Will China’s economic growth crash to 3 per cent or less?

No. The quality of Chinese growth has certainly deteriorated markedly in recent years. The property market, which contributes almost a third of gross domestic product, is slowly imploding. Many local governments are drowning in debt. The Chinese consumer is hesitant.

But GDP growth in 2024 is still set to comfortably exceed 4 per cent — assisted by a medley of debt bailout packages, fiscal stimulus initiatives and other forms of official support. Advances in technology will remain strong. James Kynge

Will a change of president in Taiwan spark a Chinese attack?

No. Many people inside and outside Taiwan worry more about war these days, thanks to China’s expanding military manoeuvres. The frontrunner in January’s presidential election, the ruling Democratic Progressive Party’s Lai Ching-te, also has a very different background to the incumbent Tsai Ing-wen.

But Lai has been clear he would follow Tsai’s cautious China policy stance — leaving Beijing with no pretext for an assault. The Chinese leadership under President Xi Jinping still seems to believe, too, that it has a chance to coerce Taiwan into unification without fighting — by stepping up military intimidation, political infiltration, economic lures and international isolation. Kathrin Hille

Will the US and the EU keep funding Ukraine?

Yes. As Ukraine’s counteroffensive against Russia’s invasion stalled in late 2023, military and financial support for Kyiv became a contentious issue on both sides of the Atlantic. The Biden Administration is determined to keep supplies flowing: a deal with Republicans in Congress might involve concessions on US border security in return for extended aid for Ukraine.

A bigger challenge will arise if Donald Trump returns to the presidency. EU leaders, meanwhile, should find ways early in 2024 of circumventing Hungary’s veto on a €50 billion financial aid package. But Ukraine is still likely to struggle to make a military breakthrough, so will come under mounting pressure to negotiate with Moscow. Tony Barber

Will Ursula von der Leyen secure a second term as European Commission president?

Yes, with some effort. Ursula von der Leyen has acquitted herself well in a term marked by crises, proving the value of common EU action in borrowing, health, defence spending, and energy policy. Her flagship European Green Deal has largely stayed on track.

But her habit of springing policies on capitals and close alignment with Washington have annoyed some leaders. Her 2019 coalition is at risk from gains by the populist right in European parliament elections. But her centre-right EPP party is in pole position to retain the presidency, even if that means closer collaboration with Eurosceptic parties. And, for now, no one seems like a stronger EPP candidate. Martin Sandbu

Will the Bank of Japan raise rates above zero?

No, 2024 will be the year the Japanese central bank finally ditches yield curve control and negative interest rates. Contrary to market expectations of several further increases, however, rates will end the year no higher than zero.

With mediocre wage growth, a stronger yen in prospect as US rates peak and reasons to prefer a steeper yield curve, the BoJ is unlikely to set a positive rate — although as with any central bank forecast, much depends on the incoming data. Robin Harding

Will the ANC vote fall below 50 per cent in South Africa’s election?

Yes, just. After 30 years in power, the African National Congress will miss out on an absolute majority for the first time since Nelson Mandela became president in 1994.

The party’s image has been eroded by years of corruption, incompetence, and appalling service delivery, epitomised by rolling power cuts. In real per capita terms, the economy has stagnated for 15 years. In 2019, under President Cyril Ramaphosa, the ANC vote dipped to 57.5 per cent. This year, it will fall again. If it goes below 50 per cent, as seems distinctly plausible, it will need coalition partners. David Pilling

Will Argentina dollarise its economy?

No. Some would argue long-suffering Argentines have already dumped the peso: they save in US greenbacks and buy and sell property unofficially in dollars.

But despite his campaign pledges to dollarise the economy, Argentina’s radical new libertarian President Javier Milei plumped instead for devaluation in his first economic measures.

Though his Economy Minister Luis Caputo insisted that adopting the US currency remains a long-term aim, it is unlikely to happen in 2024: the IMF is unenthusiastic and most economists believe the loss of economic sovereignty would outweigh the benefits. Michael Stott

Will renewables overtake coal in global electricity generation?

No. While renewable power’s share of generation is expected to outstrip coal within the next few years, it is unlikely to happen in 2024, thanks to China.

Chinese demand for coal has continued to rise rapidly in 2023 and while renewables are growing fast too — expected to account for about 90 per cent of all new generation capacity globally — this won’t quite be enough to surpass coal generation next year, even as Western coal use declines.

But the tipping point is not far away. More critical for the climate is when China’s appetite for coal finally goes into reverse. David Sheppard

Will investors go heavily back into bonds?

Yes. “Bonds are back” was the biggest bet in markets in 2023, but it was a flop. Scorching inflation and relentless interest rate rises meant that by October, the Bloomberg Barclays Aggregate bond index was down 4 per cent, rekindling memories of a brutal 2022 and frustrating big investors’ efforts to call a bottom.

Now, investors believe a slowdown of some sort is coming to the US economy as the lagged effects of interest rate rises finally kick in. With inflation sinking and rate cuts on the horizon, bonds seem a safer bet. Katie Martin

Will X go bankrupt?

Yes. Elon Musk frequently uses warnings of bankruptcy to motivate; he did it at Tesla and SpaceX. But this time, with X’s advertising tanking and attempts to create new sources of revenue falling flat, there’s a good chance it will happen.

After recent emotional outbursts against X’s advertisers, he may be reckless enough to think he can put it through bankruptcy and still come out on top. Musk fighting for control of X in bankruptcy would be a gripping sequel to the drama-filled Twitter acquisition. Richard Waters

Will Sam Altman be sacked again from OpenAI?

No. Sam Altman originally structured his company so that its board controlled a non-profit created to benefit humanity. He said he held no equity in OpenAI, and the board could fire him at any time.

But when Altman’s co-founder and three independent board members did just that in November, they ended up reinstating him four days later.

Now, all but one of the original board have been ousted; Microsoft — OpenAI’s key partner and largest financial backer — will have a role as a non-voting observer on the new board and the company’s governance will be overhauled so he cannot be put in such a position again. Madhumita Murgia

Will capital markets reopen for IPOs?

Yes. Companies can only put off fundraising for so long, and after a lean spell Wall Street bankers need to find a way for more activity to take place.

US and European IPO markets have been moribund for two years, but with interest rates peaking and stock markets back near record highs, the environment for dealmaking looks brighter.

Still, don’t expect a return to the fundraising frenzy of 2020 and 2021. Rates might be falling, but they are not going back to zero and investors will be paying more attention to profitability and balance sheet strength. Nicholas Megaw

Will Novo Nordisk end the year as Europe’s most valuable company?

Yes. In 2023, obesity treatment Wegovy became one of the most successful drug launches of all time and Denmark’s Novo overtook luxury goods group LVMH in value.

But 2024 looks challenging for those selling highly priced handbags to China — while Novo’s main issue in selling highly priced obesity medication is how quickly it can produce it.

After winning over patients and doctors to using its diabetes drug for obesity, Novo is now expanding access and coverage in a market where perhaps one million people are being treated out of a patient population of 100 million in the US and 700 million globally. Helen Thomas

Will female pop stars out-earn the men in concert tours?

No, not overall. Taylor Swift’s Eras tour this year became the first to exceed $1b in revenues — surpassing Elton John’s previous all-time record of $939 million — and continues next year. Beyonce’s Renaissance tour was this year’s number two, earning $580m.

But the gender imbalance still skews towards males. Only one other woman, Pink, was in 2023′s top 10 touring acts. Swift and Beyonce are in a league apart, earning appreciably more per show than other stadium acts. Pink and Madonna may feature in 2024′s box office charts, but male acts such as Coldplay, Bruce Springsteen and the Rolling Stones will continue to dominate. Ludovic Hunter-Tilney

Will Britain return the Parthenon marbles to Greece?

Yes — although it will almost certainly be via a loan agreement, not a full return which would require a change in UK law. Political tempers flared this year when Sunak abruptly cancelled a meeting in London with Greek premier Kyriakos Mitsotakis.

But British Museum chair George Osborne has strongly advocated a deal to allow the marbles to be displayed in Athens, with other Greek treasures coming to London in return. Starmer has hinted he would not block an accord acceptable to the museum and to Athens. Jan Dalley

© Financial Times