The world economy faces more pain in 2023 after a gloomy year.
In 2020, the world economy was hit hard by the COVID pandemic. Consumer prices began to rise in 2021 as countries emerged from lockdowns or other restrictions. This was supposed to be the comeback year for the world economy.
Instead, 2022 was marked by a new war, record inflation, and climate-linked disasters. It was a “polycrisis” year, a term popularised by historian Adam Tooze.
Now, experts are warning that 2023 could be even worse.
“The number of crises has increased since the start of the century,” said Roel Beetsma, professor of macroeconomics at the University of Amsterdam.
“Since World War Two we have never seen such a complicated situation,” he told AFP.
One of the biggest concerns is inflation. After the COVID-induced economic crisis of 2020, consumer prices began to rise in 2021 as countries emerged from lockdowns or other restrictions. Central bankers insisted that high inflation would only be temporary as economies returned to normal. But Russia’s invasion of Ukraine in late February sent energy prices soaring, and inflation has continued to rise around the world.
The other big worry is climate change. In recent years, we have seen an increase in extreme weather events like floods, hurricanes and wildfires. These events are costly, and they are only going to become more frequent and more severe as the planet continues to warm.
So what can we expect in 2023? More of the same, unfortunately. The world economy is likely to remain in a state of flux, and we could see more crises unfold. But there is still hope