BIS Annual Economic Report 2024

So far, so good...

So far, so good. The world economy appears to be finally leaving behind the legacy of the Covid-19 pandemic and the commodity price shock of the war in Ukraine. The worst fears did not materialise. On balance, globally, inflation is continuing to decline towards targets, economic activity and the financial system have proved remarkably resilient, and both professional forecasters and financial market participants see a smooth landing ahead. This was by no means a given a year ago. It is a great outcome.

Still, there is a "but". Challenges remain. The recent stickiness of inflation in some key jurisdictions reminds us that central banks' job is not yet done. Financial vulnerabilities have not gone away. Fragile fiscal positions cast a shadow as far as the eye can see. Subdued productivity growth clouds economic prospects. Beyond the near term, laying a more solid foundation for the future is as difficult as ever. It could not be otherwise: it is an arduous task that requires a long-term view, courage and perseverance.

As is customary, this year's Annual Economic Report (AER) takes the pulse of the global economy and explores policy challenges. It also devotes particular attention to two issues. Looking back, it reflects on the lessons learned so far from the conduct of monetary policy in the tumultuous first quarter of the 21st century. Looking forward, it examines the opportunities and risks associated with the rise of artificial intelligence (AI).