The Atradius Chief Economist, John Lorieassesses the economic landscape at this challenging time for the global economy.
AMSTERDAM, December 13, 2022 /PRNewswire/ — The global economy faces a sharp slowdown in growth amid an unprecedented mix of challenges. After 2023, the picture is slightly better as we expect current central bank actions and supply chain normalization to help ease price pressures.
In this edition of the Atradius Economic Outlook, we look at the economic challenges facing regions around the world. High inflation is the biggest challenge affecting the whole world. The shadow of high inflation and economic stagnation, stagflation, hangs low over many economies as the cost of living crisis unfolds, entangled by volatile food and energy prices, war Ukraine, the ongoing impact of the pandemic, high inflation and low growth. Global GDP growth is forecast to slow to 1.2% in 2023, from 2.9% in 2022.
The stagflation is expected to gradually unwind in 2023 as consumer inflation falls. Global growth is expected to pick up again by 2.9% in 2024, especially if the negative effects of the war materialize Ukraine begin to subside.
2023 is likely to be a difficult year for both emerging and advanced economies. We expect GDP growth in emerging markets to slow to 2.9% in 2023 from 3.6% in 2022. For those with high personal or government debt, additional challenges are posed by interest rates. Many advanced markets also face a slowdown in growth over the next year, with forecasts of -0.1% for the Eurozone and a 0.4% contraction for the US.
Our forecast is subject to an unusual degree of uncertainty. A major risk is persistently high inflation, fueled by fresh energy price shocks and a wage-price spiral. This would prompt central banks to take more drastic measures to contain inflation, with devastating effects on growth. Indeed, in this scenario, global GDP growth would halve to 0.6% in 2023.
Further details on the state of the world economy can be found in December 2022 Edition of the Atradius Economic Outlook. This is available for free download at https://group.atradius.com/publications/.
About Atradius
Atradius is a global provider of credit insurance, surety and surety, collections and information services with a strategic presence in over 50 countries. Atradius’ products protect businesses worldwide from the risk of default associated with the sale of goods and services on credit. Atradius is a member of Grupo Catalana Occidente (GCO.MC), one of the largest insurers in Spain and one of the largest credit insurers in the world. Further information can be found online at https://group.atradius.com
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