The World’s Business And Finance Elite Are Coming Together For Their Annual Davos Jamboree, And Their Outlook For The Global Economy Is ‘gloomy’

The World's Business And Finance Elite Are Coming Together For Their Annual Davos Jamboree, And Their Outlook For The Global Economy Is 'gloomy'
  • The outlook for the global economy in 2023 is "bleak", says the World Economic Forum.
  • A survey of economists published on the opening day of Davos shows that the risk of a global recession is increasing.

According to a World Economic Forum report published on the opening day of Davos: Leading economists' forecast for the global economy in 2023 is "bleak", with weak growth and a recession expected.

The World Economic Forum's Leading Economists' Outlook for January 2023 summarizes the views of some of the leading economists.

"Despite reasons for optimism, such as easing inflation, some aspects of the outlook remain bleak," the report said, citing "continued economic uncertainty and political challenges of historic proportions."

Almost two-thirds of the 22 leading economists surveyed by the WEF think a global recession is likely by 2023, with 18% saying it is "very likely".

"The prospects for global growth have weakened and the risks of a global recession are high," the report said.

But respondents to a panel of experts from financial and business firms such as UBS, Google, Microsoft and Bank of America expected to see big regional changes in economic growth next year.

All economists said they expected weak or very weak growth in Europe, 91% said they expected growth in the US, less than half in the Middle East, North Africa, South Asia, China and East Asia and the Pacific Ocean. . . More than half of respondents said they expect high inflation in Europe, only 5% in China.

This reflects high energy prices, interest rates and "cooling demand" in Europe, the WEF said. In contrast, China's reversal of its zero-transmission policy for Covid-19 could slowly boost the country's economy, although it could halt production if more people contract the virus.

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Companies including Amazon, Goldman Sachs and Salesforce have announced layoffs this year, and leading economists expect layoffs to continue. 86% of respondents said multinational companies will reduce operating costs and 78% expect reductions. Most economists say companies expect customers to pay more.

But despite the largely pessimistic outlook, the report points out that some of the world's economic woes may ease this year.

Two-thirds of respondents said they expect the cost-of-living crisis to ease by the end of 2023, while nearly two-thirds expect the energy crisis to end by 2023. They said they hope to start making improvements by at the end of 2023. But Dimon predicted in December that Europe's energy crisis would worsen and possibly last for years.

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