The global economy in times of polycrisis
Fecha: enero 2023
José Ramón Díez Guijarro
SEFO, Spanish and International Economic & Financial Outlook, V. 12 N.º 1 (January 2023)
The global economy is heading into the new year trying to digest the nasty surprises ensuing since the beginning of 2020, which have ushered in the biggest imbalance between supply and demand of recent decades. The pandemic, the bottlenecks in international shipping, the war in Ukraine and the surge in energy prices have altered the dynamics that have driven business cycle patterns since the financial crisis of 2008. That accumulation of shocks is proving a challenge for economic policy response in the short-term and threatening to alter the ecosystem in which the global economy has been moving since the end of the 1970s, characterised by flexibility and maximisation of production efficiency via global value chains. Although there are more questions still than answers about how this process will play out and a good number of fronts are still open, 2023 should shed some more light on key future international economic trends. While it is too soon to rule out the odd quarter of contraction in one of the major economic blocs, current signs point more to a relatively soft economic landing, without traumatic effects on employment, rather than to a full-scale recession. Indeed, the global economy could grow by around 2.5% in 2023, although with a significant slowdown in growth in both advanced economies and emerging economies. In the near-term, the key lies with the trend in inflation, the real barometer for the instability sustained by the economy in recent years. The search for new equilibriums in prices, economic policy and geopolitics will be among the main variables to watch in 2023.