Global Economic Outlook 2023: Global Recession Fears Resurface, Risks Mount

The global economy continues to be buffeted by multiple shocks, and business should prepare for continued volatility in the years ahead. A prolonged period of disruptions and uncertainties notwithstanding, there is still opportunity. 

Regarding the short-run outlook, the global economy is weakening rapidly, with the US and Europe forecast to experience recessions in the very near term and China to suffer significantly weaker growth in 2023. A global recession may be avoided, but the world will probably experience notably below-trend growth of 2.1 percent in 2023. 

Beyond 2023, the global economy will likely return to its slowing trend growth rate (2.6 percent) relative to the prepandemic pace (3.3 percent). The aging workforce across many mature and large emerging market economies will have a material dampening effect on the growth of labor and capital. As these quantitative drivers of growth slow, productivity increases will become more important drivers of output and revenue growth. 

Insights for What’s Ahead

• Risks to the global economy remain two sided, characterized by both easily modeled upsides and downsides, but also “gray swans” with less predictable outcomes.
• As investment opportunities are becoming more limited in mature economies, a business focus on emerging economies can be a potential growth strategy.
• Sub-Saharan African economies and emerging Asian economies seem best placed to continue to outperform the global average pace of growth.
• Amid elevated economic uncertainty, firms can focus on strengthening internal operations, improving external communications to all stakeholders, and shoring up long-term growth. 

For the full 10-year outlook with risks, and deeper insights for what’s ahead, click the "Download Research Report" button below.