We believe 2023 will be a transitional year, the next stage following the "low-rates, low-growth" years of 2010-19 and the "Covid years" of 2020-22, where the pandemic led to a global lockdown, massive fiscal spending, skyrocketing debt and the great reflation.
In the transitional year of 2023, the global economy will have three characteristics. First, global economic growth will decline significantly. Growth is diverging between developed and emerging market (EM) economies, with the former threatened by severe stagflation, or at least mild recession, while the latter will see slower economic growth, but a lower chance of a severe recession.
