Global Economic Direction :the End of an Era?
International financial organizations such as the World Bank or International Monetary Fund (IMF) often predict and warn about the potential for economic growth as well as its underlying problems. At the 2023 World Economic Forum Annual Meeting, the IMF's Managing Director, Kristalina Georgieva, stated that though the situation seems "less bad" compared to a couple of months ago, "less bad" does not mean "Good.”
WHAT WAS IMPROVED?
Two pieces of good news for 2023 were mentioned. First, inflation has gone down after having been high, owing largely to quantitative easing during COVID-19 and the oil and gas prices spiking from sanctions against certain countries. Another is the prospect of China boosting the growth of around 4.4%, which is expected to exceed the global average growth of 2.7%. This is mainly due to the country's quarantine policy which is now lifted.
THINGS TO BE MORE CAUTIOUS ABOUT
A 2.7% global average of growth is not high; it is the third lowest rate in decades after years of the financial downturn and the pandemic. Besides, in terms of inflation, it is still uncertain that inflation will continue marching downward. China's growth can potentially cause oil and gas prices to spike again. Lastly, policies or actions in 2023 must be monitored, as those that cause economic fragmentation could lead to a 7% loss in GDP.
There is no absolute answer regarding future predictions. Remaining levelheaded, not too optimistic nor pessimistic, and staying resilient is the best course of action in this unprecedented world. Companies should not make the mistake of stopping at “good” progress, when they can become GREAT. Although the situation is now “less bad” than it was before, that is not the signal for organizations to stop their efforts, rather it is a signal that they are the right track.
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