The global economy remains in the midst of a significant slowdown in Q3 2023. Economic activity is dampened as businesses and consumers globally face persistent inflation and further rises in interest rates in most countries. However, strong labour markets and resilience in services have contributed to a further slight improvement in the global outlook. Diverging trends within the global economy persist, as developing economies, especially emerging Asia, continue to outperform advanced economies
This report comes in PPT.
The global economy is in the midst of a significant slowdown, as real GDP growth is expected to decelerate to 2.6% in 2023. While this remains far below the long-term growth trend, the global outlook has seen gradual improvements in recent quarters. This has been driven especially by resilience in the services sector and labour markets despite persistent inflation and high interest rates in most countries. Lingering inflation and the lagged effect of high borrowing costs will continue to keep global growth subdued at 2.9% in 2024.
The US and the Eurozone are expected to see weak growth in 2023, with real GDP increasing by 1.2% and 0.6%, respectively. While facing similar headwinds in terms of elevated inflation and rising interest rates, the US outlook has improved more significantly, as both economies saw a forecast of 0.2% growth in Q1 2023. China remains a key driver of the global economy in 2023, with 5.3% growth. However, the country’s post-pandemic recovery has slowed notably, raising concerns about a lower contribution to global growth in 2024.
Emerging and developing economies remain the growth of engine of the global economy in 2023. At 3.9% real GDP growth compared to 1.0% for advanced economies, emerging and developing economies will continue to increase their global economic share. This is particularly the case for the Asia Pacific region where four economies will grow at more than 5% in 2023: China (5.3%), India (5.8%), the Philippines (5.6%) and Vietnam (5.5%). In 2024, India and Vietnam are even expected to grow at more than 6%.
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