Will the Global Economy Rebound in 2023?
Al Arabiya, Saudi Arabia, January 20
The global economy is a source of great concern to many people in 2023. The pressing question is whether the crisis will pass or not – and when will the anticipated recovery begin after a long period of hardship caused by the ramifications of the coronavirus pandemic and war in Ukraine? Experts are divided on the possibility of an economic recession due to the stringent monetary policies adopted by central banks in many countries. Some fear that raising interest rates will suppress investment, while others believe a tight policy will curb inflation without hampering economic growth. Aside from the optimistic and pessimistic outlooks, which influence the behavior of both investors and consumers, there are grounds for optimism in 2023. Many countries have displayed resilience in the face of tough economic battles in 2022. Most of these countries have managed to avoid a recession by the end of the year, which is a positive sign. Additionally, job and salary growths have exceeded the usual rate under monetary tightening and interest rate hikes, indicating the possibility of a better year than the last, provided there are no major shocks such as the pandemic or war. Moreover, inflation rates have decreased in an increasing number of crisis economies. If this trend continues in the first four months of 2023, central banks could gradually lower interest rates. Governments have provided social assistance to mitigate the effects of inflation on citizens. A sustained decrease in inflation rates could reignite the investment curve. The lifting of the last COVID-19 restrictions in China, if it continues in the current year, could also have a positive impact on the global economy. The slowdown of the Chinese economy due to the restrictions had caused disruption in supply chains, hence the improvement of the global economy may start in 2023. All of this remains to be seen. – Waheed Abdul Majid (translated by Asaf Zilberfarb)