The start of 2023 has been icy, both because of the weather – with heavy snowstorms in North America that paralyzed economic activities for a couple of weeks due to a historic polar storm – and because of the economic projections for the year that has just begun.
This year there will be a global economic slowdown that will result in one of the lowest growth rates in recent years; while inflation will ease from multi-decade highs reached in 2022, but will remain at still elevated levels, Focus Economics warned.
According to its study Global Outlook 2023. Declining Momentum, the economic analysis firm argues that world growth will slow to 1.8 percent in 2023, from 2.9 percent in 2022.
The slowdown in activity in 2023 responds, first of all, to the drop in forecasts for developed economies. According to Focus Economics, the G7 – made up of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, where more than 45 percent of the world’s wealth is concentrated – will have growth of 0.3 percent this year.
The economies of Asia (excluding Japan) will grow 4.5 percent; Latin America (1.2 percent) and the Middle East (3.4 percent). Sub-Saharan Africa should expand at a rate very similar to that of 2022 (3.6 percent), according to the firm’s forecasts; while Eastern Europe would advance 0.2 percent.
The US economy is projected to grow just 0.3 percent in 2023. A faster-than-expected Federal Reserve tightening of monetary policy, legislative paralysis complicating the debt ceiling hike, and tensions with China are risks to activity in that country, according to the economic forecasting and analysis firm. (jornada.com.mx)
The predictions are not encouraging for the countries of Western Europe, which are also experiencing a strong socio-political crisis generated by the government leaders themselves, who followed Washington’s designs to generate and now continue the Russian-Ukrainian war conflict.
Gas Supply to Europe
The forced cut off of the Russian gas supply to Europe, as part of the economic sanctions that the West imposed on the government of Vladimir Putin, has resulted in an alarming shortage of energy, which has forced most European countries to buy gas from United States but at a much higher price, which has had a strong impact on people’s pockets, businesses and industries.
The precarious energy situation, especially in Europe, will continue to cause headaches for governments in 2023. Europe could be spared from a full-blown energy crisis this winter thanks to milder-than-usual temperatures. The lower demand for heating would allow deposits to be maintained at a good level, thanks to which it will probably be possible to keep the price of gas under control next spring, thus helping to reduce inflation.
However, the situation could become more complicated ahead of next winter, when Europe could find it difficult to refill its tanks, especially as it may have to compete with China and other Asian buyers for liquefied natural gas.
Price increases will be more moderate in 2023, due to weaker demand, lower energy prices and transportation costs. However, inflation will remain above central banks’ targets, prompting further interest rate hikes.
In Germany, the powerhouse of the eurozone, inflation is expected to ease due to measures such as capping gas and electricity prices, but underlying inflation could remain high due to government transfers to help households to cope with the rising cost of living. (dw.com)
The economic crisis in Europe specifically will be the trigger for social protests to take to the streets again, as happened in 2019 and 2020 before the Covid-19 pandemic, which will pose strong challenges for European governments, and faced with the dilemma to continue obeying Washington, or look out for their own welfare and mark a departure from Anglo-Saxon warmongering.
For much of the world economy, 2023 will be a difficult year as the main engines of global growth – the United States, Europe and China – will experience weakening activity, the head of the International Monetary Fund said on Sunday, January 1.
The new year is going to be “tougher than the year we left behind,” IMF Managing Director Kristalina Georgieva said on CBS’s Sunday morning news show “Face the Nation.”
However, the economic slowdown will not be the same in all regions of the world, and countries that export raw materials and manufacturing will most likely benefit, as is the case in Latin America.
The challenge for Mexico in 2023-2024 will be to consolidate, in addition to economic stability, political stability, especially in view of the elections to be held.
It is necessary to understand that the current achievements in economic matters are not the product of a man -the president- or of an ideal, but of the application of responsible economic, financial and fiscal policies, far from populism and complacency (of politicians and businessmen ) of previous governments that did so much damage to the country and to Mexicans.
This article is originally published on concienciapublica.com.mx