Skip to content
Back to Insights
  • Global Research
    • General Research Insights
    • Automation
    • Demographics
    • Digital finance
    • Disruptive technology
    • Energy transition

Big-picture shocks to the global economy

James Pomeroy, Global Economist

Article

  • Article

The world often feels like a worrying place, with downside risks aplenty. In recent years, they’ve been easy to find – from the pandemic to wars and the shock of higher interest rates. And yet, through all these challenges, the global economy has kept rolling – the US economy has grown quickly, rather than sinking into recession, and stock markets hit record highs.

there are plenty of good things happening across the global economy

When thinking bigger picture, it’s just as easy to be nervous about the future. Climate change risks upending life as we know it, deglobalisation and geopolitical tensions could mean sustained periods of higher inflation and weaker growth. AI could bring about a dystopian future of job losses and misinformation, and ageing populations across the world could mean that already elevated debt levels become unmanageable.

Given these challenges, it's easy to see why many often see the world through such a negative light. But we also want to highlight the reasons for hope. There are plenty of good things happening under the surface, across the global economy, which are worth keeping in mind. Some of them focus on climate change, where the rollout of clean energy continues to happen at an unimaginable pace, and the lower costs now mean investment in solar and wind power is likely to accelerate across the world.

On tech, for all the worries about AI, it could also offer tremendous benefits and usher in an era of unprecedented human discovery, making it much easier to find cures for diseases or solutions to other existential problems within society. The continued spread of digital technology could be a huge boost to underlying productivity, too.

In terms of demographics, the rapid ageing of the world’s population creates fiscal headaches, but slower global population growth could lessen the pressure on natural resources and infrastructure. Part of the reason for this shift is the ultimate good news: people are living longer, healthier lives.

As a result, it’s important to remember framing. Books such as Not the End of the World by Hannah Ritchie and Factfulness by Hans Rosling do that expertly – highlighting how bad news can often dominate the reality happening under the surface.

The truth is that the risks to the global economy over the coming decade are much more finely balanced than we may often hear about – with many commentators focusing just on one of these areas in isolation. In practice, these factors will push against each other – some lifting potential growth and others pulling it down.

the risks to the global economy are finely balanced

The impact across the world will also be uneven from each of these shocks – both by sector and economy. Some areas could see huge support from digitisation and favourable demographics, whilst others could see the catastrophic impact of climate change or structural fiscal strains. This creates an even tougher world for policymakers, businesses, and investors – but one where it is important to be aware of the various underlying changes in the global economy and how they can influence the pace and shape of global growth.

Would you like to find out more? Click here to read the full report. Please note, you must be a subscriber to HSBC Global Research to access this link.

To learn more about HSBC Global Research, including how to subscribe, please email us at AskResearch@HSBC.com

The following analyst(s), who is(are) primarily responsible for this document, certifies(y) that the opinion(s), views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: James Pomeroy

This document has been issued by the Research Department of HSBC.

HSBC and its affiliates will from time to time sell to and buy from customers the securities/instruments, both equity and debt (including derivatives) of companies covered in HSBC Research on a principal or agency basis or act as a market maker or liquidity provider in the securities/instruments mentioned in this report.

Analysts, economists, and strategists are paid in part by reference to the profitability of HSBC which includes investment banking, sales & trading, and principal trading revenues.

Whether, or in what time frame, an update of this analysis will be published is not determined in advance.

For disclosures in respect of any company mentioned in this report, please see the most recently published report on that company available at www.hsbcnet.com/research.

Additional disclosures

  1. This report is dated as at 22 October 2024.
  2. All market data included in this report are dated as at close 16 October 2024, unless a different date and/or a specific time of day is indicated in the report.
  3. HSBC has procedures in place to identify and manage any potential conflicts of interest that arise in connection with its Research business. HSBC's analysts and its other staff who are involved in the preparation and dissemination of Research operate and have a management reporting line independent of HSBC's Investment Banking business. Information Barrier procedures are in place between the Investment Banking, Principal Trading, and Research businesses to ensure that any confidential and/or price sensitive information is handled in an appropriate manner.
  4. You are not permitted to use, for reference, any data in this document for the purpose of (i) determining the interest payable, or other sums due, under loan agreements or under other financial contracts or instruments, (ii) determining the price at which a financial instrument may be bought or sold or traded or redeemed, or the value of a financial instrument, and/or (iii) measuring the performance of a financial instrument or of an investment fund.

This document has been issued by HSBC Bank plc, which has based this document on information obtained from sources it believes to be reliable but which it has not independently verified. Neither HSBC Bank plc nor any member of its group companies (“HSBC”) make any guarantee, representation or warranty nor accept any responsibility or liability as to the accuracy or completeness of this document and is not responsible for errors of transmission of factual or analytical data, nor is HSBC liable for damages arising out of any person’s reliance on this information. The information and opinions contained within the report are based upon publicly available information at the time of publication, represent the present judgment of HSBC and are subject to change without notice.
This document is not and should not be construed as an offer to sell or solicitation of an offer to purchase or subscribe for any investment or other investment products mentioned in it and/or to participate in any trading strategy. It does not constitute a prospectus or other offering document. Information in this document is general and should not be construed as personal advice, given it has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Accordingly, investors should, before acting on it, consider the appropriateness of the information, having regard to their objectives, financial situation and needs. If necessary, seek professional investment and tax advice.
The decision and responsibility on whether or not to purchase, subscribe or sell (as applicable) must be taken by the investor. In no event will any member of the HSBC group be liable to the recipient for any direct or indirect or any other damages of any kind arising from or in connection with reliance on any information and materials herein.
Past performance is not necessarily a guide to future performance. The value of any investment or income may go down as well as up and you may not get back the full amount invested. Where an investment is denominated in a currency other than the local currency of the recipient of the research report, changes in the exchange rates may have an adverse effect on the value, price or income of that investment. In case of investments for which there is no recognised market it may be difficult for investors to sell their investments or to obtain reliable information about its value or the extent of the risk to which it is exposed. Some of the statements contained in this document may be considered forward looking statements which provide current expectations or forecasts of future events. Such forward looking statements are not guarantees of future performance or events and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements as a result of various factors.
This document is for information purposes only and may not be redistributed or passed on, directly or indirectly, to any other person, in whole or in part, for any purpose. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. By accepting this report, you agree to be bound by the foregoing instructions. If this report is received by a customer of an affiliate of HSBC, its provision to the recipient is subject to the terms of business in place between the recipient and such affiliate. The document is intended to be distributed in its entirety. Unless governing law permits otherwise, you must contact a HSBC Group member in your home jurisdiction if you wish to use HSBC Group services in effecting a transaction in any investment mentioned in this document.
Certain investment products mentioned in this document may not be eligible for sale in some states or countries, and they may not be suitable for all types of investors. Investors should consult with their HSBC representative regarding the suitability of the investment products mentioned in this document.
HSBC and/or its officers, directors and employees may have positions in any securities in companies mentioned in this document. HSBC may act as market maker or may have assumed an underwriting commitment in the securities of companies discussed in this document (or in related investments), may sell or buy securities and may also perform or seek to perform investment banking or underwriting services for or relating to those companies and may also be represented on the supervisory board or any other committee of those companies.
From time to time research analysts conduct site visits of covered issuers. HSBC policies prohibit research analysts from accepting payment or reimbursement for travel expenses from the issuer for such visits.
HSBC Bank plc is registered in England No 14259, is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority and is a member of the London Stock Exchange. (070905)
© Copyright 2024, HSBC Bank plc, ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of insert issuing entity name. MCI (P) 008/01/2024, MDDI (P) 006/09/2024, MDDI (P) 004/10/2024, MDDI (P) 020/10/2024

  • Global Research
    • General Research Insights
    • Automation
    • Demographics
    • Digital finance
    • Disruptive technology
    • Energy transition

Need help?

Get in touch to learn more about our banking solutions and how we can help you drive your business forward.