The Natixis 2024 Outlook Survey, which includes 500 institutional investors, found that “geopolitical bad actors who with one action can upset economic and market assumptions globally” could be the catalyst for market chaos and global instability next year. “That’s likely because it’s the kind of risk that can’t be anticipated and factored into plans for the year ahead. And that’s the real challenge for institutional investors,” Natixis says. Nearly half of respondents (49 percent) rank bad actors as their top economic threat, with the conflict between Russia and Ukraine, China policy, and concerns over BRICs nations being top of mind. "After seeing how the early stages of the Russian invasion of Ukraine drove big price spikes for energy and food in 2022, institutions have good reason for concern as the geopolitical landscape is looking less stable going into 2024," according to the Natixis report. Sixty-four percent believe that China’s political ambitions “will split the global economy into two spheres of influence,” which “diminish China’s investment appeal for 73 percent of institutions.” Nearly three-quarters (73 percent) think Russia drawing closer ties with North Korea and Iran will create greater economic instability. Many are also expecting the U.S. election to bring volatility next year, with 64 percent of North American institutions believing the 2024 election is more relevant to global markets than previous years. “The political picture is further clouded by prospects of another controversial US election season as 72 percent of institutions worldwide, and 79 percent in North America, think a messy US campaign will lead to increased market volatility,” according to Natixis. “Another 59 percent believe any skepticism over election results will also have a negative impact on the markets.” The survey echoes other research suggesting a more pessimistic outlook for the global economy over the next 12 months. Half of global fund managers surveyed last month by Bank of America expect a weaker economy over the next year, with 44 percent expecting a recession during the first six months of 2024.An annual institutional outlook survey finds that the biggest economic risk for 2024 is geopolitics.
