The Davos elite like making bold prophecies but often get them incorrectly

The World Economic Forum, located in Davos, Switzerland, kicks off next week. It is a yearly meeting where exclusive global groups of business leaders, politicians, and economists make valiant prophecies and attempt to set the annual agenda. Unfortunately, however, they still often turn out to be wrong.

Here is a summary of a few calls which are made in recent years.

European recession:

The destiny of Europe’s economy was a big concern at the WEF annual meeting, held in May 2022, in the wake of the invasion of Russia on Ukraine.

Jane Fraser, CEO of Citigroup, said in a panel that she thinks much more concerning for Europe, which is right in the middle of the storms from supply chains, energy crisis, and just the presence of some of the outrages happening in Ukraine.

When asked whether a recession would occur in Europe, she answered yes. However, she also added that she hoped she would be wrong.

Though the region’s growth rate has taken a hit and inflation has increased, Europe has so far got away from a recession.

Many analysts foresee that there’ll be one in early 2023 but anticipate it to be “not severe.” For instance, Berenberg envisions GDP to reduce by 0.1% in the eurozone this year.

But Goldman Sachs has developed its outlook on the region, mentioning this week it no longer foretells a recession for the area of Europe.

Goldman analysts mentioned in a note that they maintain their view that the area growth of Europe will be weak over the months of winter provided the energy crisis but no longer watch for a technical recession. 

“This reflects more resilient growth momentum at the end of last year, sharply lower natural gas prices, and earlier China reopening,” Goldman analysts said in the note.

They added that this gives back a resilient growth momentum at the end of the previous year, sharply lesser natural gas costs, and earlier reopening of China.