George Soros, billionaire and founding father of Soros Fund Management, on the World Economic Forum in Davos, Switzerland, January 2016.
Matthew Lloyd | Bloomberg | Getty’s paintings
The World Economic Forum kicks off next week in Davos, Switzerland. It’s an annual gathering where a world elite of business leaders, politicians and economists make daring predictions and check out to set an agenda for the approaching 12 months – but they do not all the time succeed.
Here’s a summary of some calls made lately.
European recession
The fate of the European economy was the main focus of much attention on the WEF’s annual meeting in May 2022 within the wake of the Russian invasion of Ukraine.
Citigroup Chief executive Jane Fraser told the panel: “I feel it’s way more about Europe, which is in the midst of the storms of supply chains, the energy crisis and the proximity of among the atrocities that are happening in Ukraine.”
When asked if Europe would experience a recession, Fraser gave a definite answer: “Yes – and I hope I’m mistaken.”
Although growth within the region has slowed and inflation has increased, the EU has to this point avoided recession. Many analysts predict it will occur in early 2023, but they expect it to be “mild”. For instance, Berenberg expects GDP (gross domestic product) to fall by 0.1% within the euro area this 12 months.
![Europe is heading into recession, says Citigroup CEO Fraser](https://image.cnbcfm.com/api/v1/image/107065561-16533234081653323391-23329062876-1080pnbcnews.jpg?v=1653323407&w=750&h=422&vtcrop=y)
But Goldman Sachs has improved its outlook for the region, saying this week it not predicts a recession for the eurozone.
“We stand by our view that eurozone growth will likely be weak within the winter months as a consequence of the energy crisis, but we not expect a technical recession. This reflects a more resilient growth rate late last 12 months, much lower natural gas prices and China’s earlier reopening,” Goldman analysts wrote in a note.
They pointed to a GDP growth rate of 0.6% in 2023, while the consensus assumed a decline of 0.1%.
Nuclear War
Billionaire investor George Soros warned during a speech in Davos in 2018 that the US might be headed for nuclear war with North Korea.
“The USA is on track for nuclear war by refusing to just accept it [North] Korea has change into a nuclear power,” he said on the time.
The Obama administration also said in 2016 that it was the best threat to national security.
To this point, the US has avoided military conflict with North Korea. In reality, recent concerns on this direction have focused on Russia within the aftermath of its invasion of Ukraine.
FTX failure
Cryptocurrencies have been shaky throughout 2022, but those available in the market didn’t expect the collapse of FTX – once a $32 billion cryptocurrency exchange.
Brett Harrison, who was president of FTX US, told CNBC in Davos in 2022 thatthe corporate was in a “superb position” by way of capital and was considering acquisitions.
US authorities arrested Sam Bankman-Fried, the previous CEO, in December and charged him with electronic fraud, securities fraud and money laundering. Bankman-Fried pleaded not guilty.
Bitcoin drops to zero?
Bitcoin has had a volatile run, but in 2021 and 2022 it hit levels well above those of 2019. It has since fallen from all-time highs, but its trading levels this week are still higher than 4 years ago.
US-EU trade agreement
At WEF 2020, then-German Finance Minister Olaf Scholz said yes confident that a trade deal between the US and the European Union will likely be concluded. Scholz, who’s now the country’s chancellor, said on the time: “Ultimately, we all know that trade is most successful if there should not too many barriers.”
The 2 sides of the Atlantic have resolved some trade disputes since US President Joe Biden took office in 2021 – but they still seem removed from a comprehensive trade deal.
In reality, European countries have expressed concern about Biden’s Inflation Reduction Act, arguing that it discriminates against European corporations and doesn’t respect international trade rules.
Changes at Credit Suisse
Despite media reports in 2022 suggesting Credit Suisse was considering replacing then-CEO Thomas Gottstein, when CNBC asked Credit Suisse CEO Axel Lehmann denied the reports in Davos.
“They didn’t seek advice from me and I do know they didn’t, so that’s bad,” he said.
The Swiss bank announced in July that Thomas Gottstein was stepping down.