RAPID development in science and technology during the last twenty years has brought about wonderful — sometimes unbelievable and amazing — advancements in our lives, which, before the advent of the new century, were only dreams. Electronic media, in particular, has brought the whole world virtually into our palms. Smart-phones have literally transformed the entire world into a global village. As a result, a single country’s economy has integrated and become a part and parcel of the global economy. What happens in the Tokyo Stock Exchange — the land of the rising sun — in the morning, affects trading in London, Paris, Germany, and New York, thousands of miles away, within minutes. The value of global currencies fluctuates within minutes based on economic data from countries, instantly available to us. Thanks to computers, laptops, and, of course, smart-phones.

The global economy proved to be more resilient than anticipated in 2023. At 3%, global GDP growth surpassed consensus expectations by one percentage point. This outperformance was even more remarkable in that it occurred despite the fastest monetary policy tightening cycle in four decades, severe banking sector stress, wars in Ukraine and Israel and a brief but severe tightening of financial conditions in the fall.

The key drivers behind this solid global economic performance were stronger labour market growth supporting a rebound in inflation-adjusted income growth, a delayed re-balancing in the growth mix driven by services, a much less severe drag from tighter monetary policy thanks to healthy household and corporate balance........

© Pakistan Observer