The world economy has remained unpredictable since the Covid-19 pandemic outbreak. Although it has shown substantial improvements in the past months, the WEF (World Economic Forum) says it is far from recovery. The WEF made these remarks following the conclusion of the ‘Cooperation in a Fragmented World’ 2023 annual meeting. In any case, the meeting occurred during unprecedented global economic uncertainties such as geopolitical conflict, climate change, energy crisis, and high inflation.
But growth has shown an upward trajectory and might record a more steady recovery through 2023. Some key factors improving the economy include the new Covid-19 restrictions in China and global cooperation. Meanwhile, financial experts believe inflation is slowing down as the recent restrictions seek to boost economic growth. The International Monetary Fund has forecast that the Chinese economy might attain about 4.4% to outpace global growth.
Generally, the strong labor markets, resilient consumer spending, and signs of dropping inflation indicate that economic growth might rebound quickly. The World Economic Forum also released the 2023 Global Risk Report. It suggests that geo-economic tensions and conflicts have triggered several deeply interconnected world economic risks, with the rising cost of living being the most apparent one. On the other hand, climate adaptation and climate change remain the most concerning long-term risks.
The European Central Bank also remains cautious regarding the world economic outlook but has confidence that we could shape a more equitable, sustainable, and resilient future. For that reason, the UN called for urgent solutions for several interconnected risks, such as climate and world economic crises. Although the global economy still faces substantial risks, it is possible to avoid a severe recession. The world community has progressed in tackling climate, energy, and food crises.
Meanwhile, global business leaders have remained pessimistic about the world economy in the past months, but cautious optimism is emerging. The leaders expect China to showcase robust growth and lead the world to global recovery. The country showcased steady economic growth in 2022 despite facing a complex external environment and strict Covid-19 restrictions.
Its GDP (Gross Domestic Product) rose 3% yearly to attain a high of about 17.95 trillion dollars in 2022. Thus, the country could achieve a much better GDP with the new Covid-19 restrictions allowing more business activities. Nonetheless, experts have predicted that the first quarter of 2023 might become bumpy and potentially the second one.
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