WEF – Chief Economists Outlook September, 2023

The September 2023 Chief Economists Outlook report by WEF reveals a slowing global economy and ongoing economic uncertainty. While recession concerns have eased, six out of ten chief economists expect the global economy to weaken in the upcoming year. Political factors are expected to have a significant influence, with the majority of respondents predicting volatility due to geopolitics and domestic politics. In terms of regional growth, Asia is expected to remain the strongest, except for China, which faces deflationary pressures. The outlook for the US has strengthened, with eight out of ten respondents anticipating moderate or strong growth in 2023 and 2024. However, Europe is expected to experience weak or very weak growth in 2023, although there is optimism for improvement in 2024. While inflationary concerns are expected to persist in the short term, 86% of respondents believe the worst of the inflationary surge will be over in a year. This optimism is driven by expectations of weaker wage growth, looser labor market conditions, and fading supply-chain pressures. Respondents also expect a slower pace of tightening in inflation-prone economies and a less synchronized global monetary policy in the coming year. Chief economists highlight potential negative impacts from prolonged financial tightening, such as tighter lending conditions, increased corporate debt defaults, and corrections in property and equity markets. The report also highlights the challenges faced by developing countries due to geopolitical tensions and tighter financial conditions, with only a minority of respondents expecting stronger cooperation and increased private capital flows between advanced and developing economies. However, if private capital flows can be unlocked, there is optimism about its effectiveness in driving progress in areas such as digital transformation, energy access, food systems, and climate change.