In an article published earlier this year by The World Economic Forum, several chief economists highlighted the significant uncertainty in the global economic outlook. There is a stark division among economists regarding the likelihood of a worldwide recession in 2023, with 45 percent considering it likely and another 45 percent deeming it unlikely. The report emphasised the necessity for international cooperation and adaptive policymaking to navigate the unpredictable economic landscape.
Key takeaways from the report included:
Global economic uncertainty
The report underlines the challenges posed by the COVID-19 pandemic and a more competitive geopolitical and geoeconomic environment to established business and industry models.
Regional Economic Growth
Asia is predicted to experience the most robust economic growth, with 93 percent of economists foreseeing at least moderate growth in the region.
China leads the way in Asia, with 97 percent of respondents anticipating moderate, strong, or very strong growth after reopening post-lockdowns.
European Economic Outlook
Europe is expected to have weak or very weak economic growth in 2023, though this marks an improvement from earlier predictions.
Europe faces the highest risk of stagflation – a combination of high inflation and economic stagnation.
There are notable increases in inflation expectations across all regions, with Europe facing higher risks of high or very high inflation.
In the US, expectations of high inflation have tripled since January, creating a trade-off for central banks between managing inflation and maintaining financial sector stability
Central Bank Actions
Around 80 percent of chief economists believe central banks face a trade-off between managing inflation and maintaining financial stability.
Despite this, there is consensus that central banks will likely slow the pace of interest-rate rises in 2023.
Concerns about Property Markets
Property markets are a significant area of concern, with 67 percent of economists expecting "significant disruption" in this sector.
The report emphasised the need for concrete actions to foster inclusive global growth amid challenges such as high inflation, uneven growth, and geopolitical fragmentation.
World Finance honours those companies that have taken up the challenges that 2023 has presented and are forging head during such challenging times.