2024 Outlook

We continue to set ambitious targets for the future to meet our 2030 strategic ambitions. Considering the current and future expected market conditions, this will not be an easy feat. However, for every challenge, FMO sees an opportunity. Our role and purpose as a development finance institution is more relevant than ever before.

External developments and economic outlook

In January 2024, the International Monetary Fund (IMF) projected that global growth will be at 3.1 percent in 2024, consistent with the estimate for 2023. Growth in emerging markets and developing economies is also expected to hold steady at 4.1 percent in 2024. Global inflation is expected to decrease to 5.8 percent in 2024, down from 6.8 percent in 2023. However, inflation in emerging markets and developing economies is projected to remain relatively high at 8.1 percent, showing only a slight decline of 0.3 percent compared to 2023. Decreases in inflation are driven by monetary policies, softening labor markets and ongoing declines in relative energy prices. The IMF outlines several factors that could impact global growth in 2024. Among these are the extent to which low-income and emerging market economies are able to manage their high debt levels, the progression of geopolitical tensions, and productivity gains stemming from artificial intelligence. The latter may initially benefit advanced economies more than emerging markets and developing economies.35

Slower economic growth, high interest rates, and continued geopolitical tensions are forecasted for 2024 and will affect the context in which FMO operates. These factors will influence financing opportunities, while highlighting the importance of DFI action.

Several upcoming regulations require preparation in 2024, such as Basel IV, Corporate Sustainability Reporting Directive, Digital Operational Resilience Act and environmental risk-related regulations. While additional regulations will encourage sustainable practices, significant investments will be required to implement them. Artificial intelligence developments will continue to pose opportunities and threats, which could further increase the gap between developed and developing countries.

35 International Monetary Fund (January 2024). World Economic Outlook Update: Moderating Inflation and Steady Growth Open Path to Soft Landing.

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