At the 9th Annual Private Banking Conference & Awards Switzerland 2024 event, hosted in Zurich, Dr Stefan Gerlach, chief economist at EFG Private Bank, explained what to expect from macroeconomics over the next year.
To generally sum up the world economy at the moment, Gerlach plainly said: “We’ve seen a little growth in some and debt growth in some others.”
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While there are economic issues to discuss, “people only want to talk about Trump”.
Gerlach stated: “When speaking to people in Washington, they say Trump has proposed bold but not wise policies, and they are often contradictory.
“For example, deregulation of the banking sector may boost the economy but tightening immigration may have a big shock on the labour market.”
In Europe: “The Swiss economy is doing well and growing robustly. The flatline is Germany.”
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By GlobalDataThis was attributed to a growth model with focus on manufacturing and exports, particularly to China, as well as the importance placed on the automotive industry and cheap Russian energy.
In addition, tight fiscal policy and political instability have not helped.
Gerlach continued: “Public deficits and debts are and will remain key policy problems in Europe. Large deficits are normal in deep recessions or episodes of exceptional government outlays, such as war or the Covid-19 pandemic. Dealing with debt will be a key policy going forward.”
However, there were highlights in the Eurozone in terms of growth and from, perhaps, an unexpected source.
Gerlach concluded: “Driving Eurozone performance is countries like Spain, Portugal, Greece, and Ireland. All of these ‘problem countries’ are now growing strongly.”
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