The world will see an economic slowdown this year as countries grapple with high inflation, energy price pressures and rising interest rates – but will avoid recession, says PwC.
The consultancy’s latest Global Economy Watch expects global GDP to expand by around 1.6% in 2023, with G7 economies growing by just 0.1%.
In its main scenario projections, the UK is set to record the largest contraction across the G7 at -0.8%, closely followed by Germany at -0.5% and Italy at -0.4%. Meanwhile France may report modest growth of 0.1%. US growth is also expected to slow to 0.2%, but it will probably avoid a technical recession, defined as two successive quarters of negative growth.
India is set to see the highest growth across the G20, with 5.4%; Indonesia, with 4.4%, will be the fastest-growing Southeast Asian economy, and Ireland will record the highest growth in the Eurozone, at 2.3%.
China’s economy is forecast to expand by 4.7%, although this will highly depend on the progress of the re-opening of the country from Covid measures. House prices will fall or flatline across most advanced economies, according to the report.
“Many advanced economies saw substantial increases in house prices during the pandemic, as buyers took advantage of low interest rates and higher savings accrued during lockdowns,” said PwC economist Jake Finney. “For the countries facing the highest exposure, it is possible that they could see double-digit per cent falls, reversing most of the pandemic gains.