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"Financial Times" predictions for 2024: Trump will not become President of the USA, X will go bankrupt

2024-01-02 22:14:34Kosova&Bota SHKRUAR NGA REDAKSIA VOX
 "Financial Times" predictions for 2024: Trump will not become
"Financial Times" predictions for 2024

As every year, the daily Financial Times has made its predictions for the year we have entered. According to FT predictions, US President Joe Biden may win the presidential elections held this year. Meanwhile, Ukraine's allies will continue to provide support for it against the war that Russia has opened. 

Will Donald Trump become the president of the USA again?

No. But assuming the last legal hurdles raised against Trump's stay in Colorado and Maine are overcome, his campaign against Joe Biden would make for the ugliest presidential election in US history. It will be a very close race. Trump will be criminally charged in at least one of his four trials, possibly two, before the election and will present it as political persecution by the "Biden family."

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 likely turn out to be the hottest in the 174 years of climate records once the final numbers are tallied. But many scientists expect 2024 to be even warmer because the heat of 2023 was boosted by the emergence of a naturally occurring El Niño climate pattern. This usually has the biggest effect on global temperatures after it peaks, which could happen as late as January 2024. 

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

No. The war has fueled violence across the region involving Iranian-backed militant groups. The biggest concern is that border skirmishes 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 that it can no longer live with Hezbollah fighters stationed on the Lebanon-Israel border, but the hope is that diplomatic pressure will contain the situation. Neither Washington nor Tehran wants a wider regional conflict, even if fighting between Hezbollah and Israel intensifies, but the situation is extremely volatile. 

Will the US achieve a mild reduction in inflation?

Yes, in the short term. Inflation has fallen in a way that has surprised even the Federal Reserve this year, and growth has remained stronger than most economists expected. As consumer spending remains strong and wage growth well contained, a mild slowdown could continue for several months. But don't bet it will last all of 2024. There will be less fiscal support as handouts to families from the Covid era have been used up. Higher interest rates are fueling bankruptcies, worries about the US debt are rising and geopolitical stresses are fracturing global trade. This could increase inflation and slow growth.

Will Keir Starmer become Prime Minister of Great Britain?

Yes, although it's possible the UK election won't happen until January 2025. Rishi Sunak's Conservatives look divided and exhausted. The number of seats the Labor opposition needs to win means it could land somewhere between a minority government. But it is extremely difficult to see how the prime minister can get enough support to hold on to power.

Will China's economic growth fall to 3 percent or less?

No. The quality of Chinese growth has certainly deteriorated significantly 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 confused. But GDP growth in 2024 is still set to easily exceed 4 percent, helped by a mix of debt bailouts, fiscal stimulus initiatives and other forms of official support. Advances in technology will remain strong. 

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

No. Many people inside and outside Taiwan worry more about war these days, thanks to China's expanding military maneuvers. The front-runner in January's presidential election, Lai Ching-te of the ruling Democratic Progressive Party, also has a very different background from incumbent Tsai Ing-wen. But Lai has been clear that he would follow Tsai's cautious stance on China policy, leaving Beijing with no pretext for an attack. The Chinese leadership under President Xi Jinping still appears to believe, too, that it has a chance to force Taiwan to reunify without a fight, increasing military intimidation, political infiltration, economic lures and international isolation. 

Will the US and the EU continue to fund Ukraine?

Yes. As Ukraine's counteroffensive against the Russian invasion stalled in late 2023, military and financial support for Kiev 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 could include concessions on US border security in exchange for extended aid to Ukraine. A bigger challenge will arise if Donald Trump returns to the presidency. EU leaders, meanwhile, must find ways in early 2024 to override Hungary's veto of a 50 billion euro bailout package. But Ukraine is still likely to struggle to make a military breakthrough, so it will be under increasing pressure to negotiate with Moscow. 

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

Yes, with a little effort. Ursula von der Leyen has acquitted herself well in a crisis-ridden mandate, proving the value of EU joint action on borrowing, health, defense spending and energy policy. Its flagship European green deal has largely stayed on track. But her habit of crafting policies over capitals and close alignment with Washington have irked some leaders. Her 2019 coalition is at risk from the gains of the populist right in the European Parliament elections. But her centre-right EPP party is in pole position to retain the presidency, even if it means closer cooperation with Eurosceptic parties. And, at the moment, no one looks like a stronger EPP candidate. 

Will the Bank of Japan raise rates above zero?

2024 will be the year when the Japanese central bank will finally remove the control of the yield curve and negative interest rates. However, contrary to market expectations for some further hikes, rates will end the year no higher than zero. With average wage growth, a stronger yen on the horizon, US rates peaking and reasons to prefer a steeper yield curve, the BoJ is unlikely to set a positive rate even though as any central bank forecast depends heavily on input data.

Will the ANC's vote drop below 50 percent in South Africa's elections?

Yes, alone. After 30 years in power, the African National Congress will lose 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 abysmal service delivery, epitomized by constant power outages. In real per capita terms, the economy has stagnated for 15 years. In 2019, under President Cyril Ramaphosa, the ANC's vote fell to 57.5 percent. This year it will fall again. If it goes below 50 percent, as seems clearly plausible, it will need coalition partners.

Will Argentina dollarize its economy?

No. Some would argue that long-suffering Argentines have already ditched the peso: they save in dollars and buy and sell property unofficially in dollars. But despite his campaign promises to dollarize the economy, Argentina's new radical libertarian president, Javier Milei, settled for devaluation in his first economic measures. Although his economy minister, Luis Caputo, insisted that adoption of the US currency remains a long-term goal, it is unlikely to happen in 2024. The IMF is not enthusiastic, and most economists believe that the loss of economic sovereignty would outweigh the gains. .

Will renewables overtake coal in global electricity production?

No. While the share of renewable energy production is expected to overtake coal within the next few years, it is unlikely to happen in 2024, thanks to China. Chinese coal demand has continued to grow rapidly in 2023, and while renewables are also growing rapidly, expected to account for about 90 percent of all new generation capacity globally, this will not be enough to exceed coal production next year, even as western coal use declines. But the turning point is not far. More critical for the climate is when China's appetite for coal finally reverses.

Will Bond Investors Return Too Much?

Yes. "Bonds are back" was the biggest bet in the markets in 2023, but it was a failure. Scorching inflation and relentlessly rising interest rates meant that by October, the Bloomberg Barclays Aggregate Bond Index was down 4 percent, rekindling memories of a brutal 2022 and frustrating big investors' efforts to make ends meet. Now, investors believe some sort of slowdown is coming to the US economy as the lingering effects of rising interest rates finally kick in. With inflation falling and rate cuts on the horizon, bonds look a safer bet. 

Will X go bankrupt?

Yes. Elon Musk often uses warnings of bankruptcy to motivate; he did it at Tesla and SpaceX. But this time, with the decline of X's ad cuts and efforts to create new revenue streams, there's a good chance it will. After recent emotional outbursts against X's advertisers, he may be foolhardy enough to think he can ride it through bankruptcy and still come out on top.

Will Sam Altman be fired from OpenAI again?

No. Sam Altman originally structured his company so that its board controlled a non-profit organization designed to benefit humanity. He said he had 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 it four days later. Now, all but one of the original board have fallen; Microsoft, OpenAI's main 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 reviewed so that it cannot be put in such a position again. . 

Will capital markets reopen for IPOs?

Yes. Companies can only put off fundraising for so long, and after a weak spell on Wall Street, bankers need to find a way to drum up more activity. The U.S. and European IPO markets have been in the doldrums for two years, but with interest rates peaking and stock markets back near record highs, the deal-making environment is looking brighter. However, don't expect a return to the fundraising frenzy of 2020 and 2021. Rates may be down, but they won't go back to zero, and investors will pay more attention to profitability and balance sheet strength. 

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

Yes. In 2023, obesity treatment ëgovy became one of the most successful drug launches of all time, and Denmark's Novo surpassed luxury goods group LVMH in value. But 2024 looks challenging for those selling high-priced handbags in China, as Novo's main issue in selling its high-priced obesity drug is how quickly it can produce it. After winning over patients and doctors to use its obesity diabetes drug, Novo is now expanding access and coverage to a market where perhaps 1 million people are being treated out of a patient population of 100 million in the US and 700 million worldwide.

Will female pop stars earn more than men on concert tours?

No, not in general. Taylor Swift's Era tour this year became the first to surpass $1 billion in revenue, surpassing Elton John's previous all-time record of $939 million — and it continues next year. Beyoncé's Renaissance Tour was second this year, earning $580 million. But the gender imbalance still leans towards men. Only one other woman, Pink, was in the top 10 touring acts of 2023. Swift and Beyoncé are in a league of their own, earning significantly more per show than other stadium acts. Pink and Madonna may appear on the 2024 ticket charts, but boy bands such as Coldplay, Bruce Springsteen and the Rolling Stones will continue to dominate. 

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 Rishi Sunak abruptly canceled a meeting in London with Greek Prime Minister Kyriakos Mitsotakis. But British Museum chairman George Osborne has strongly defended a deal to allow the marbles to go on display in Athens, with other Greek treasures coming to London in return. Labour's Keir Starmer has hinted he would not block an acceptable deal for the museum and Athens.


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