Global business sentiment has now fully recovered from the banking system–related weakness earlier this year. Businesses are more confident that a global economic slowdown can be avoided and see little chance of severe recession in 2024, according to Oxford Economics in its latest Global Business Sentiment Index, which reflects the results of the flash Global Risk Survey for September. The survey was conducted from September 4–13, following evidence of a healthy first half 2023 for the global economy but amid signs of slowing growth in third quarter.
The Global Business Sentiment Index has risen in September to 98.0, up from 97.6 in July. The latest reading implies that businesses' mean expectation is for world GDP in a year's time to be 2 percent below the level forecast before the coronavirus pandemic.
The latest results confirm that the hit to sentiment earlier this year from banking strains has fully unwound. Businesses, on average, expect the relatively subdued pace of growth this year to continue next year. By contrast, our baseline forecast anticipates slower global growth, with a soft end to 2023 persisting into 2024.
Business uncertainty over the economic outlook has also eased. One indication is the small probability attached to severe weakness in the global economy — like the 1.5 percent contraction of the global economy in 2009 during the global financial crisis. Businesses today see only a 2 percent chance of 2024 growth turning out as weak as in 2009.