Economic Growth

Global growth will cool this year due to higher interest rates and the cost-of-living crisis. However, the U-turn in China’s Covid-19 policies, a resilient U.S. economy, and a healthy global labor market should soften the downturn. Faster-than-expected monetary tightening, a spillover of the Russia-Ukraine war, U.S.-China tensions and a global energy crunch are key risks.

Economic Growth

The regional economy will lose steam in 2023 on tight financial conditions and lower average prices for key commodity exports. However, recovering tourism arrivals, China’s Covid-19 reopening and a likely soft landing of the U.S. economy will prop up the external sector. Outbreaks of sociopolitical unrest and tighter-than-expected monetary policy are key risks to the outlook.

Economic Growth

Regional growth will nearly halve this year from 2022’s projected level. Above-target inflation, high borrowing costs dampening credit and still-elevated unemployment will dampen private spending. The projected global slowdown bodes ill for remittances, tourism and regional export revenue. Domestic political instability is a risk.

Economic Growth

The regional economy should grow at a slower pace this year. A slowdown in domestic demand amid still-high inflation, tighter financing conditions and less expansionary fiscal stances caused the deceleration. A worsening global economic environment will have also contributed. That said, rising tourist numbers will support activity, and China’s reopening poses a key upside risk.

• East Asia

Economic Outlook

The regional economy will gain steam this year. The lifting of Covid-19 restrictions in China will boost Chinese demand and fuel stronger exports and tourist arrivals in other East Asian economies. That said, tighter monetary policy in most countries and slowdowns in the U.S. and Europe will cap momentum. China-Taiwan tensions and the speed of China’s recovery are risks.

Russia-Ukraine War Economic Impact - Analysis & Special Reports

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Economic Growth

Economic Growth

Regional growth will cool significantly this year. A weaker Euro Area economy, elevated inflation, geopolitical volatility and the war in Ukraine will restrain household spending, industrial production and exports. On top of this, tighter financing conditions should further subdue activity in most countries. Turkey should expand more robustly than its smaller regional peers.

Economic Growth

The regional economy will shrink again this year as war-related costs and international sanctions continue to hurt the Russian and Belarussian economies. While the rest of the region should experience growth, this will be capped by still-elevated inflation and the downturn in important trading partner Russia. Additional spillover from the war in Ukraine is the key risk.

Economic Growth

GDP growth in the Middle East & North Africa will soften to near the 10-year pre-pandemic average this year. Rate hikes, stagnating oil production and weakening external demand will all weigh on activity. Key factors to watch include changes to OPEC+ quotas, U.S. Fed hikes, extreme weather, geopolitical tensions and the Russia-Ukraine grain deal—which was recently extended to mid-March 2023.

Economic Growth

This year, regional GDP growth should be largely stable. Underperformance in heavyweights South Africa and Nigeria will drag on healthy growth elsewhere. Meanwhile, higher borrowing costs and elevated debt levels will increase servicing costs, boding ill for public finances and threatening debt sustainability. Extreme weather events are also a risk.