Euromonitor International forecasts global economic growth to slow significantly to 2.3% in 2023, as demand weakens amid uncertainties, inflation and tightened financial conditions. Unemployment could rise, but the labour market will remain tight. Commodities prices are expected to soften and supply chain issues to ease, while energy-intensive industries still face challenges and will see slower growth. Consumer spending in cities will be curbed by economic slowdown and a higher cost of living.
This report comes in PPT.
Global economic growth will slow down significantly in 2023, though emerging markets will provide some relatively bright spots. Inflation is expected to moderate, but will remain high. Coupled with tightening financial conditions, these factors are set to undermine business and consumer confidence.
Companies will face a volatile and challenging business environment in 2023, given the various economic headwinds. After a record low level in 2022, the unemployment rate is expected to rise again in advanced economies in 2023, owing to economic slowdown. Labour markets will remain tight, as structural changes will continue to drive labour and skills shortages.
High inflation and economic instability will curb urban consumer spending in 2023, as people will continue directing more of their incomes to cover necessities, such as food and utilities. This will challenge those cities where the local economy heavily depends on leisure, recreation and accommodation services.
Prices of most commodities are forecast to continue retreating from the highs reached in the aftermath of the post-pandemic demand spike and Russia’s invasion of Ukraine. However, these forecasts are subject to numerous risks, including an escalation of the war in Ukraine, supply and demand imbalances, adverse weather conditions and potential energy price shocks.
A worsened economic outlook and energy price shocks are forecast to weigh on the global industrial sector in 2023, with energy-intensive industries witnessing slower growth. However, global supply chain problems are expected to ease in 2023, providing relief to the global manufacturing sector.
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