On New Year’s Day 2023, Reuters reported on an economic outlook for this year offered by Kristalina Georgieva the Managing Director of the International Monetary Fund (IMF). She predicted that the coming year would be "tougher than the year we leave behind," and added: "Why? Because the three big economies - the U.S., EU and China - are all slowing down simultaneously.

Global Economic Resilience

However, on 31st January, Time Magazine reported that the IMF had shifted its forecast to a more optimistic position.

“The outlook for the global economy is growing slightly brighter as China eases its zero-COVID policies and the world shows surprising resilience in the face of high inflation, elevated interest rates and Russia’s ongoing war against Ukraine.
“That’s the view of the International Monetary Fund, which now expects the world economy to grow 2.9% this year. That forecast is better than the 2.7% expansion for 2023 that the IMF predicted in October, though down from the estimated 3.4% growth in 2022.”

The Time Magazine report goes on to explain: “Globally, the IMF expects consumer inflation to fall from 8.8% last year to 6.6% in 2023 and 4.3% in 2024.”

The article’s reference to the “surprising resilience” globally to unprecedented events mirrors the remarkable way that businesses in the UK were able to meet the challenges posed by the Covid-19 pandemic. That is a firm base on which to build back to economic recovery.

Robust Supply Chains

On the 20th January 2023, Fortune Magazine posted an article by Alan Wolff, Deputy Director General of the World Trade Organisation (WTO) titled “In a fragmented world, we can’t take global trade for granted.” This opened with the words:

“Trade served the world economy very well in 2022. Despite a global pandemic that has caused nearly 7 million deaths (over 1 million of them in the United States), trade bounced back and supplied needed vaccines, medical supplies, and equipment around the world–while supporting an economic recovery that was much stronger and faster than projected.”

The term “resilience” was again applied, this time to the robustness that had been shown by global supply chains. Then after commenting on a relatively successful meeting of the WTO in June 2022, the author commented that: “This does not suggest that there will be smooth sailing for international trade in 2023.”

Alan Wolff finishes his post for Fortune by saying: “With goodwill and strong efforts, the 164 members of the WTO can find a way to pull together and move toward a better place. America should be in the lead to make this happen.”

We can all support this objective. However, in the meantime, while we hope for the best, we must prepare for the worst and the many variations of challenge in between.