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Europe is where we see more 'sluggish growth', says KPMG

Euronews' Angela Barnes with Regina Mayor, Global Head of Clients and Markets at KPMG International, at the World Economic Forum's Davos 2024 summit.
Euronews' Angela Barnes with Regina Mayor, Global Head of Clients and Markets at KPMG International, at the World Economic Forum's Davos 2024 summit. Copyright Euronews
Copyright Euronews
By Angela BarnesIndrabati Lahiri
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High inflation and unemployment could leave the continent lagging behind other major economies in 2024, according to global accounting firm KPMG.

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Global growth could hit 2.2% this year but Europe could very likely see slower growth than that, according to an executive at Big Four accounting firm KPMG.

"Inflation is still quite high and quite persistent. Unemployment is higher than it is in other parts of the world," KPMG's global head of clients and markets Regina Mayor told Euronews Business at the World Economic Forum (WEF) in Davos. 

"And we're not seeing the bullish customer sentiment that's driving more of the economic growth that you're seeing in places like the US," she added. "So in the European continent, we're predicting a lot slower growth overall."

Across the globe, cautious optimism seems to be the watchword for businesses in 2024, as some 70 elections are coming up this year, "where half the world will be going to the polls," said Mayor.

As she puts it, "Change can be a good thing, once we have a level of certainty as to what that change will be."

Although downside risks such as geopolitical uncertainties persist, Mayor does not feel that the ongoing Middle Eastern crisis will inflame energy and oil prices too much, with triple-digit prices for oil barrels being quite unlikely. This is also due to OPEC+ strategies having less influence on oil prices lately. 

However, the Red Sea attacks by Yemeni Houthi rebels on cargo ships may cause price rises for several other products, as recently warned by Tesco.

Other market risks include a more sluggish mergers and acquisitions market, with investors wary of making big decisions, such as new markets or more debt.

Best investments this year

Coming to top investment sectors this year, Regina highlighted that there's "a lot of potential for AI", as a survey from KPMG showed that 70% of CEOs said it was going to be the top investment area. Nevertheless, 57% were still worried about AI regulations and ethical issues.

There are also considerable concerns about how training and implementation can make AI tools their most productive for companies and their employees, said Mayor. 

Other sectors of potential investments include a focus on climate, environmental, social, and corporate governance (ESG) and a focus on talent. 

An increasing number of CEOs are also keen on bringing employees back to the workplace, which could drive more growth and innovation strategies focused on that, said Mayor.

Video editor • Joanna Adhem

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