Although economic predictions are usually reserved for the foolhardy, as the future is always difficult to ascertain, there are certain trend lines and probabilities that can be discerned at the global and regional level as well as the local level here in Thailand. As a year-end exercise, we can tease out a few contours with a reasonably high degree of probability.
In 2023, global economic headwinds will likely gather pace as years of undisciplined central banking and ultra-low interest rates necessitate monetary policy tightening worldwide. Higher interest rates to forestall inflationary pressure will be compounded by higher prices of petrol and natural gas, partly owing to Russia's aggression against Ukraine earlier this year and the consequent energy squeeze. For most of the past two decades, ultra-low interest rates have led to rising inequality and polarisation that underpinned the Arab Spring, the resurgence of populism, and mass protests around the world. Wealthy elites and big corporations were able to tap oceans of risk-free capital at the expense of ordinary people's savings. This intoxicating period of easy money is likely to be followed by hard times.
