Economic uncertainty is expected to continue throughout 2023. But some economies like the US have been more resilient than anticipated from a result of a strong labour market.
In 2022 central banks globally rapidly raised interest rates to counter inflation. Yet, with diverging monetary policies and economic trajectories between the US and other key economies, the US dollar reached a two-decade high against other major currencies. This has significant implications for the global economy, businesses and consumers. This article explores the drivers, impact and outlook on the US dollar surge.
2022 was a year of uncertainty dominated by the impact of Russia’s invasion of Ukraine, high commodity prices, soaring global inflation, a cost-of-living crisis squeezing consumer spending potential and China’s controversial zero-COVID policy. Here is a look at the insights which resonated the most with our audience.
In 2023, global economies will continue to face multiple macroeconomic headwinds, including geopolitical uncertainties, inflation and tightened financial conditions. Global economic growth is expected to further slow, while cities will witness subdued consumer spending growth.
The worsened economic outlook and energy price shocks are forecast to weigh on the global manufacturing sector in 2023, with industries with high energy intensity and highly reliant on investment demand being the most vulnerable. However, despite the clouded outlook, global supply chain problems are forecast to ease in 2023 and provide relief to the global manufacturing sector. Ongoing production reshoring efforts and tight labour markets are also forecast to support faster investment growth in digital and production automation tools.
Trade tensions and major disruptions in global supply chains have pushed investors to look for alternative business locations. The regional bloc of the Association of Southeast Asian Nations (ASEAN) is increasingly viewed as a prospective option for new investments thanks to trade liberalisation, rapid digital advancement and cost advantages.