The international business community expects a challenging 2023 marked by geopolitical tensions, high inflation and the energy crisis, according to the Eurochambres global economic survey published on Wednesday.
The report, based on the responses of trade and commerce organisations representing around 70% of world economic output, shows prolonged geopolitical tensions and instability as the top challenges for the global economy this year.
“In the short term, we are in a difficult economic situation,” Eurochambres’ president Luc Frieden told Reuters.
Participants from the United States and the United Kingdom see rising inflation fuelled by soaring food and energy prices among the top challenges.
“Inflation is still too high,” Frieden said, adding that there should be improvements in the main drivers – energy prices and supply chains problems – as the year progresses.
“The supply chain issues will not be resolved overnight,” given the impact of the the COVID-19 pandemic and the Ukraine war, Frieden said, adding that he expected some improvements in the second half of 2023.
Energy security is of particular concern in the European Union. While Europe has achieved a lot in the crisis, buying energy in a coordinated way and investing more in renewable energy, he said, there is more that Europeans can do together.
“Europe continues to be in a difficult situation, there is no strong growth,” he said.
Survey participants were asked about their expectations for real gross dommestic product growth in their country or region for 2023, which were compared to benchmark forecasts from the International Monetary Fund.
U.S. and Chinese participants had similar real GDP growth estimates to those of the IMF, while the British Chambers of Commerce forecast of a 1.3% economic contraction was much more pessimistic than the 0.3% growth predicted by the IMF.
In the euro zone, the forecasts were largely in line with the IMF, though they varied from country to country. The Spanish and Italian chambers of commerce were more optimistic than the IMF while their German counterpart DIHK predicted a greater slowdown than the IMF.
However, the DIHK forecast of a 3.0% contraction in 2023 dates back to autumn and the economic environment has brightened considerably in the past months, with some economists now saying that the euro zone’s largest economy could avoid a recession.
The 2023 Eurochambres global economic survey was conducted in November and December 2022.