Economic slowdown is not a prediction, it's happening globally now!
Concerns are gradually rising over significantly low campus placement in premier institutes like IITs due to global economic challenges. Generally, Indian Institute of Technology (IIT) is preferred by students and parents for securing a good placement and advanced learning opportunities. However, across IITs, nearly 30% of students are yet to be placed after placement season in this year. Even after the placement season, approximately 36% of students in IIT Bombay (the most renowned institute in India) are yet to get a job offer. The story is same for other IITs too. In IIT Kharagpur, Indore, and Bhubaneswar, only 65%, 60%, 75% of students got job offers respectively in the placement season.
Under this uncertain situation, we will discuss about some eye-opening insights and trends about global economic slowdown.
The Future of Growth Report 2024 by World Economic Forum (WEF) mentioned: “This downturn is exacerbating a range of interconnected global challenges, including the climate crisis and a weakening social contract, which are collectively reversing progress in global development.”
The global economy is controlled by numerous factors. Unfortunately, after devastating pandemic, all those factors are in not so healthy state. It's like the butterfly effect. A slight change in one factor is capable enough to deteriorate the whole system. As per new World Bank report: “Global economic growth is estimated to fall to its lowest rate in three decades by 2030 amid the ongoing economic and geopolitical shocks.”
Geopolitical Tension will Harm Economic Growth: Since last couple of year, geopolitical scenario is not so stable globally. These tensions enhance uncertainty, hurt investment as well as economic growth. Geopolitical conflicts reduce global supply capacity. Continued crisis will lead to an increased oil price. “This could stoke global inflation and reduce global growth by 0.2 percentage point,” as per WEF report.
Financial Stress will Increase More: Although the policy interest rates is expected to come down in 2024, but it will not be effective in many countries as it was in negative zone for a long time. The combined impact of slower growth, high real interest rates, as well as rising debt levels made economic condition of many countries vulnerable.
The WEF report mentioned: “most countries continue to grow in ways that are neither sustainable nor inclusive and are limited in their ability to absorb or generate innovation and minimise their contribution and susceptibility to global shocks.”
Climate Change will Impact Economy: Climate change is going to worsen the situation more as natural resources are depleting. With global warming, water crisis is increasing which is impacting agriculture and associated economy. Even, the risks of natural disasters like wildfire, cyclones, drought, are increasing globally. This eventually reduce economic growth.
The policymakers are now asking leaders to adopt new approaches for economic growth to balance the efficiency, long-term sustainability with a collaborative effort.
“Reigniting global growth will be essential to addressing key challenges, yet growth alone is not enough. The report proposes a new way for assessing economic growth that balances efficiency with long-term sustainability, resilience and equity, as well as innovation for the future, aligning with both global and national priorities,” WEF Managing Director Saadia Zahidi said.
The World Economic Forum introduced a two-year ‘Future of Growth’ initiative for a new narrative for economic growth. This will support global policymakers, economists as well as experts to identify the suitable course for growth, innovation, sustainability, along with resilience goals.
