Multiple shocks have knocked the global economy since the outbreak of COVID-19 to date. Entering the year 2023, which many call a post-pandemic period, a question arises: has the economy recovered?
Some say that the economy is recovering. Some others say that countries and businesses need to prepare for continuous unpredictability in the years ahead. In other words, there is still hope or opportunity within a continued period of troubles and volatilities.
How is the Economy Now?
So, is the economy doing well? The world’s economy has witnessed a series of severe and mutually underpinning shocks in 2022.
The continuous impacts of the Covid-19 pandemic are still reverberating worldwide. A new crisis unleashed by the war in Ukraine has disrupted global food and energy markets, worsening the existing food insecurity and malnutrition in many developing countries.
High inflation has eroded real incomes, generating a crisis of global cost of living and pushing more into economic hardship and poverty. The climate crisis has taken a heavy toll globally – floods, heat waves, hurricanes, wildfires, etc. – imposed both enormous humanitarian and economic damage.
Are We Already in The Fear of a Recession?
As stated by Marc Goldwein – senior vice president and senior policy director at the Committee for a Responsible Federal Budget – we are undoubtedly not in a recession. Overall, the nominal economy is highly strong and the labor market is slowly growing back. The problem is more likely inflation – the economy might be slowing down but not going negative.
Moreover, the Conference Board research reported that we may avoid a global recession but the growth will probably still be below the trend of 2.1 percent in 2023.
If The Economy Has Improved
According to Justin Wolfers (an economist at the University of Michigan), the answer is yes, to the question has the economy recovered or improved. In the case of the US, job growth continues at a rapid rate, making it not only good but also better.
On the other hand, some reported that economic growth has exceeded consensus expectations. One of the examples is many businesses and households that retain an unexpected extent of activity and spending while in social distancing.
Also, not to mention some expected rebounds in the industry (for example, the kaolin business, especially for cosmetic, plastic and rubber, or pharmaceutical products), construction, services, and trade sectors.
More sectors that have been financially revived are the ongoing trends accelerated by the impact of the pandemic – digital economy, digital behaviors, remote working, online learning, telemedicine, and delivery services, as well as supply chains.
If The Economy Has Not Improved
The persistently high inflation has driven the hostile monetary tightening in both developed and developing countries. The rapid climbs of interest rates incurred by the Federal Reserve of the US have prompted capital leakages and currency devaluations in many developing countries. This leads to increased pressures on balance-of-payment and intensified debt sustainability risks.
Escalating interest rates and shrinking buying power have weakened both consumer confidence and investor sentiment. It clouds the world’s economy in near-term growth projections.
When Will the Economy Fully Recover?
It is, of course, impossible to predict the future – will the economy return to normal or fully recover? The global pandemic, the war between Russia and Ukraine, and inflation have made everything feel gloomy.
According to the IMF, the global economy tends to decelerate this year – from 3.4% in 2022 to 2.9% in 2023 – but will pick up next year (3.1% in 2024). It is less gloomy than last year’s prediction, in which economic growth may bottom out and inflation decline.
The slowing and rebounding are somewhat in tune with the analysis by the UN’s Department of Economic and Social Affairs. It projects that the world’s gross product growth will slow from an expected 3.0% in 2022 to only 1.9% in 2023 which will moderately rebound to 2.7% in 2024.
Inflation pressures began to subside as global financial conditions get better. The US dollar’s weakening last November has provided a modest help to many emerging and developing nations.
Going back to the question, has the economy recovered, let’s not be discouraged by the volatility. We need to stay alert and observant without losing optimism. Elsewhere, the re-opening of China has paved the way for those rebounding activities, including the kaolin business. In this case, PT Yukami is one of the leading options for kaolin suppliers with worldwide experience and high-quality standards.