The global economy is facing a difficult year, in which it will teeter on the brink of recession. This is the conclusion of the half-yearly Economic Outlook of the credit insurer Atradius. “We expect a temporary, mild stagnation.”
This projected stagnation for 2023 is partly due to the current high inflation, says John Lorié, chief economist at Atradius. “This does not mean that the world economy will stop, we expect growth between one and one and a half percent.”
That small edge is mostly in emerging markets in Asia, says Lorié. ‘Growth is still considerable and the economy in China will also slowly recover. But the Eurozone, the United States and Latin America will stay around zero or even go into negative territory’.
Most likely scenario
The question is whether a good forecast can be made with the large amount of uncertain factors at the moment, such as the price of energy, inflation and the war in Ukraine. ‘These uncertainties are very large indeed, but it is our job as economists to develop a view in which we believe the most. That doesn’t mean that this will eventually come true, but this is the most likely scenario. However, this probability is slightly lower than usual,” Lorié points out.
The outlook for the Netherlands looks good for now, with growth down by half to one percent. ‘This is relatively favorable compared to the slight contraction expected for the eurozone. Germany is facing a steeper contraction than 1%, which is really a manufacturing economy that has been hit hard by rising energy prices. The Netherlands is a commercial and service economy and that is why we are less affected by the price increase here.”
Shooting in perspective
The global economy is expected to recover after 2023. Over the next year, inflation will decline and the recovery will continue into 2024, Lorié thinks.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
