Global Growth Forecasts For 2023
January 11, 2023—The global economy is “perilously close to falling into a recession,” the World Bank warned yesterday, with a forecast that projects 1.7 growth for the world. That projection is down significantly from the bank’s forecast last June. Persistently high inflation, rising interest rates, and weakening confidence are bringing growth estimates down in an atmosphere of gloom.
“The global economy is on a razor’s edge. Even a small shock can trigger an outright recession,” said Ayhan Kose, director of the World Bank’s Prospects Group. “The slowdown is a very sharp one, and it is broad-based.”
Economic Growth Continues
While that is gloomy news, it might not be as bad as it sounds. For instance, a lot of economies are likely to continue growing. The countries projected to have growth rates in 2023 in the positive territory, according to the World Bank’s January 2023 estimates, are as follows:
- India: 6.6 Percent
- Bangladesh: 5.2 Percent
- Thailand: 4.8 Percent
- Egypt: 4.5 Percent
- Indonesia: 4.3 Percent
- China: 4.3 Percent
- Saudi Arabia: 3.7 Percent
- Nigeria: 2.9 Percent
- Angola: 2.8 Percent
- Turkey: 2.7 Percent
- Iran: 2.2 Percent
- Argentina: 2.0 Percent
- South Africa: 1.4 Percent
- Japan: 1.0 Percent
- Mexico: 0.9 Percent
- Brazil: 0.8 Percent
- Poland: 0.7 Percent
- Pakistan: 2.0 Percent
- The United States: 0.5 Percent
It’s noteworthy, however, these growth rates don’t reflect the circumstances of people living in these countries. They don’t account for consumer costs, housing, and employment. But they are a starting point for looking at economies.
Russia’s Recession
Meanwhile, Russia’s economy is expected to contract by 3.3 percent. That’s less than its contraction of 3.5 percent in 2022. Prior to its invasion of Ukraine, the ongoing war there, and the imposition of severe sanctions by the West, Russia’s economy grew by 4.8 percent in 2021. The recession there is a significant change and one that impacts the overall figure for the global economy.
Europe Flatlines
The bank’s projections for the European Union concur with a recent prediction by the International Monetary Fund. In terms of GDP, the bank says it’s likely to remain the same with no growth or contraction. That’s likely to vary for individual countries.
Oil And Other Commodities
Meanwhile, the year is starting off with lower oil and gas prices, and that should help bring inflation figures down. However, those prices are likely to stay in the volatile territory for some time.
The China Factor
It should also be noted that 2023 is likely to present a few surprises of its own that impact the global economy. Of course, wartime tensions, supply chains, and geopolitical events are some of those. But the China factor is the more immediate one. It is, after all, still the second-largest economy in the world.
As China reopens its country and economy to the world, it will impact its trading partners as well as its economic competitors. Growth forecasts, therefore, might change once again.
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