Although keeping an eye on the national economy is always wise, it is key to taking a more global view of things. It enables you to not only stay updated on world affairs but also allows you to see how the global economic outlook might impact your own life.
This could be in terms of investments you might have in foreign stocks or trades you have open on foreign currencies. For business owners who export goods to overseas destinations, keeping an eye on the global economy is also worthwhile.
But what five key things should you know about the global economy currently?
1. GDP figures are more important than ever
One thing you should know about the global economy right now is how important gross domestic product figures are¾, but what is GDP exactly? In simple terms, this data provides a quick factual overview of how a country’s economy is performing at that period in time.
GDP data is especially key for the global economy currently as it can help people understand its state as we move through 2023. This can help investors decide which markets might be best to put money into or which sectors in their own country might be on the rise.
News that US GDP data in Q4 of 2022 accelerated at a better-than-predicted 2.9%, for example, could signal that a better time is on the cards nationally in 2023. GDP figures are also key to the global economy currently as people are looking for signs that the downturn that many economies saw in 2022 is coming to an end.
2. Slowdown in the global economy
While economic news for individual countries might be positive, one thing to know about the wider global economy right now is that a slowdown in growth is predicted. The World Bank recently announced this due to high inflation levels in many countries, increased interest rates, and the ongoing impact of the Russian invasion of Ukraine.
The global economy was in a pretty fragile state anyway after the COVID-19 pandemic, and it seems the above factors have currently combined to slow it right down. When you learn that the recent forecasts for 2023 have been revised down for 95% of developed economies and 75% of emerging ones, you can see what state the world is in.
3. China is back on form
While making math fun for young children is sensible for any parent, looking at the current state of the global economy is something any adult should take time to do.
But what is going on right now? China, like many other major countries, has endured a tough few years in economic terms. However, the recent decision in Beijing to focus on economic stabilization has led to a more positive outlook for the country. Projections of 5% growth in the Chinese economy certainly point to this and is a sign of the gradual awakening of the country’s economy.
Much of this has been boosted by China’s decision to return to normal life in recent weeks and the positive impact that this has had on the country’s many businesses. While weakened demand for exports might remain an issue, there is no doubt that consumer spending in China is helping businesses there recover.
4. Europe struggling in 2023 so far
In line with the predicted global downturn for 2023, Europe is in choppy waters right now. The combined impact of rising energy prices, rising food prices, and the Russia/Ukraine war seem to be having a lasting influence on European economies. Rising inflation also seems to be an issue around Europe currently, and many believe that supply-side inflation problems could lead to a European regional recession.
5. Some countries profiting from Russian oil supplies
As you may expect, the sanctions applied to Russia around oil supplies have forced the country to search far and wide for people to sell oil to. This has seen countries such as India, Egypt, and Kazakhstan take on orders for seaborne Russian oil.
Egypt, for example, has seen oil exports jump up over 9,000% percent lately, and this appears to suggest that the country is accepting Russian oil before shipping it out to other countries. In terms of the global economy right now, this has seen some countries feel a very positive impact from deals around Russian oil.
The global economy is currently complex
There is no doubt that the worldwide economy has been in a perilous position in the last few years, and it looks to be in a similar position right now. With a global slowdown in terms of growth on the cards, and regions such as Europe struggling to bounce back from 2022, the picture is not overly optimistic at the moment.
However, with the US posting better than expected GDP figures in Q4 of 2022, and others like China looking set to re-emerge in 2023, things may well pick up.