As we head into the second half of 2023, the global economy is on a slow recovery path, navigating uncertainties of high inflation and ongoing pandemic effects. Advanced economies are showing resilience, buoyed by China’s late-2022 reopening, leading to a 2.5% predicted global GDP growth this year.
The US and Eurozone economies maintain momentum despite challenges, with growth forecasts revised to 0.9% and 0.5%, respectively. However, factors such as high-interest rates, inflation, and banking sector turmoil could dampen this growth in the case of the US.
Contrastingly, emerging markets in Asia, led by China, are set to outperform, with the Asia Pacific region anticipated to see the highest GDP growth of 4.6%. This includes rapidly growing economies like India, Indonesia, the Philippines, and Vietnam.
While global inflation is expected to remain high at 6.9%, there’s potential for a global economic rebound in 2023-2024 if conditions improve. However, the threat of stagflation looms, with major economies at risk of a hard landing amid disruptive supply conditions and stringent monetary policies.