RIYADH: The likelihood of a global recession in 2024 is lower than the previous year but inflationary risks remain high due to an unpredictable political landscape, said Goldman Sachs CEO.
In a recent podcast, David Solomon emphasized that he believes they are entering 2024 in a more constructive environment, however, he clarified that does not mean “we have absolutely landed the plane and there is no chance of a recession in 2024.”
Solomon said: “Inflation has definitely abated meaningfully, but I still think that there are headwinds. If you look at the geopolitical dynamics that can affect energy, I do think that inflation has the potential to be a little stickier than the market currently thinks.”
According to the CEO, there is a greater chance that the US Federal Reserve is still more conscious of inflation and that the central bank’s decision will be impacted by the ongoing political environment.
“I think the Fed will watch the data and to the degree that the data warrants, we will see appropriate action, but I’m not quite as bullish as everyone else that we’re going to see a series of cuts this year and we’re going back to an environment of much, much lower interest rates,” he said.
Solomon further noted that “there are still a significant number of headwinds that are going to keep interest rates higher for longer.”
Additionally, he mentioned that global merger and acquisition activities are expected to increase in 2024 and 2025 compared to 2023. Source: arab news