Economic slowdown looms in 2023

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The growth outlook for 2023 has been further revised downwards. Unsurprisingly, inflation, with the higher cost of raw materials, energy and gas and the rise in prices as well as the zero covid policy in China explain this macroeconomic pessimism. Europe remains the most negatively impacted continent, China with its drastic restrictions is struggling to recover while some Asian countries are doing well.

 

With the pandemic and, even more so, the war in Ukraine, growth is expected to decelerate sharply and inflation is high in 2023. According to the latest reports from the Organisation for Economic Co-operation and Development (OECD), global GDP is expected to grow by 2.2%, down from 3.1% this year. If an energy shortage occurs during the winter, this growth could fall below 2% and global GDP could fall by 10%. The report states that the war in Ukraine, led by Russia, “increases the risk of debt distress in low-income countries, but also food insecurity”.

 

Europe in the red, oil exporting countries in the green

 

According to OECD projections for 2023, Europe is expected to be the continent most affected by the economic slowdown. Its growth is expected to be around 0.5% in 2023, down from 3.3% in 2022. Germany’s fall will be the biggest, caused by its dependence on Russian gas for years. The countries least affected by the slowdown will be Greece, Hungary and Spain. France and Italy will also be among the countries most affected. In a report published last October, the International Monetary Fund (IMF) said that France should end the “whatever it takes” approach in favour of more targeted and temporary budget support.”

 

On the other side of the globe, in North America, the United States is said to be capping at 0.5% while Mexico is said to be at 1.6%. Among the OECD countries with the least gloomy outlook are Turkey (3%), Israel (2.8%), Australia (1.9%) and Japan (1.8%).

 

In sub-Saharan Africa, growth is expected to continue to slow to around 3.7%. However, thanks to oil production, some countries will drive growth upwards, such as Senegal (8.1%), the Democratic Republic of Congo (6.7%) and Côte d’Ivoire (6.5%). The non-oil countries of the African continent are experiencing a gradual recession. Not to mention the numbers, institutions are concerned about the continent’s food security.

 

Various scenarios in Asia

 

With its zero covid policy and drastic restrictions, China is in the red and paying a very high price to itself. Even if the economy of the world’s most populous country were to start recovering, thanks in particular to luxury goods, its growth would be between 2.8% and 3.2%. This is the lowest level since the early 1970s. The zero covid policy pursued by the Xi Jinping government would cost it between 1 and 2 GDP points.

 

For their part, the main countries of South Asia have been catching up rapidly since the beginning of 2022, thanks in particular to tourism. The three strongest economies are Vietnam with 7.2% GDP growth in 2022, the Philippines (6.5%) and Malaysia (6.4%), for which the forecasts are similar in 2023.

 

The world’s second most populous country, India, is unlike any other Asian country. Its GDP is now growing faster than that of its rival China.  After a 7.6% recession in 2021, the country will grow by 6.8% in 2022 and between 6 and 7% next year. According to economic experts, India will become the world’s most populous country with 1.4 billion people, almost one-eighth of the world’s population. To cope with this, it will face new challenges. By 2027, its GDP is expected to surpass that of Japan and Germany and it will become the third largest economy in the world behind the US and Russia.

 

 

Read also > Massive strikes: the UK is not celebrating

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The growth outlook for 2023 has been further revised downwards. Unsurprisingly, inflation, with the higher cost of raw materials, energy and gas and the rise in prices as well as the zero covid policy in China explain this macroeconomic pessimism. Europe remains the most negatively impacted continent, China with its drastic restrictions is struggling to recover while some Asian countries are doing well.

 

With the pandemic and, even more so, the war in Ukraine, growth is expected to decelerate sharply and inflation is high in 2023. According to the latest reports from the Organisation for Economic Co-operation and Development (OECD), global GDP is expected to grow by 2.2%, down from 3.1% this year. If an energy shortage occurs during the winter, this growth could fall below 2% and global GDP could fall by 10%. The report states that the war in Ukraine, led by Russia, “increases the risk of debt distress in low-income countries, but also food insecurity”.

 

Europe in the red, oil exporting countries in the green

 

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The growth outlook for 2023 has been further revised downwards. Unsurprisingly, inflation, with the higher cost of raw materials, energy and gas and the rise in prices as well as the zero covid policy in China explain this macroeconomic pessimism. Europe remains the most negatively impacted continent, China with its drastic restrictions is struggling to recover while some Asian countries are doing well.

 

With the pandemic and, even more so, the war in Ukraine, growth is expected to decelerate sharply and inflation is high in 2023. According to the latest reports from the Organisation for Economic Co-operation and Development (OECD), global GDP is expected to grow by 2.2%, down from 3.1% this year. If an energy shortage occurs during the winter, this growth could fall below 2% and global GDP could fall by 10%. The report states that the war in Ukraine, led by Russia, “increases the risk of debt distress in low-income countries, but also food insecurity”.

 

Europe in the red, oil exporting countries in the green

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Thanks to its extensive knowledge of these sectors, the Luxus + editorial team deciphers for its readers the main economic and technological stakes in fashion, watchmaking, jewelry, gastronomy, perfumes and cosmetics, hotels, and prestigious real estate.

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