The year began with a relatively bright outlook for the world economy following a strong recovery in 2021. All indications pointed to another year of strong global growth. The pandemic was coming to an end and optimism surged among companies and households. But then a new shockwave hit – before the former even had time to settle.
Russia’s invasion of Ukraine has been condemned by leaders of the world’s democracies and has fundamentally changed the landscape for global economic and political development. We are most likely facing a completely new playing field.
The war has unleashed more uncertainty, new disruptions to trade and supply chains and spiralling commodity prices, which fans the flames of inflation. This has put particular strain on the world’s central banks sparking a considerable risk of policy mistakes. Business Sweden's current assessment is that the inflationary shockwave around the world is temporary, that a tightening of monetary policy will occur sooner than expected. Despite a downward revision, global GDP is expected to grow by 3.4 per cent this year and 3.2 per cent in 2023, which is above the historical average.
The European economy has put on the brakes and is expected to grow by 1.9 per cent this year and 2.1 per cent next year. The forecast for North America remains robust with an expected GDP growth of 3.2 per cent this year, settling at 2 per cent in 2023. Asia is expected to remain stable over the next two years with a GDP growth forecast of 4.5 per cent this year and 4.7 per cent next year.
Unlike most parts of the world, the inflationary pressures in Asia have been relatively moderate which allows for the use of monetary policy to support the recovery. If the war in Ukraine becomes protracted with additional sanctions, and if Europe’s energy supply from Russia is cut off, the global economic effects will be far more severe.
Get our full analysis in the report Global Economic Outlook featuring a special section on an increasingly isolated Russia.
About the analysis
Business Sweden’s semi-annual global economic outlook including a review of current developments in important Swedish export markets as well as forecasts for Swedish exports and country and regional economic growth.
The outlook includes a review of recent developments in the Swedish economy, but its main focus is the macroeconomic performance of the three key regions for Swedish exports: Europe, Asia and North America. Major Swedish export markets like Germany, the US and China are thoroughly analysed. An appendix provides the most recent hard data for 34 markets.