5 Economic Predictions for 2023

UTC by Andy Watson · 4 min read
5 Economic Predictions for 2023
Photo: Unsplash

Following periods of badly managed economic policies, including external factors such as Russia’s invasion of Ukraine, the price of crucial commodities has skyrocketed in Europe.

Following a rather turbulent couple of years for many world economies, investors and analysts are looking to next year and trying to forecast some economic changes we may experience. It cannot be easy to calculate predictions over 12 months as it is an incredibly long time for economies. A lot can happen, however, based on what we have seen during the last 12 to 18 months, we will make five economic predictions that may prove true next year, and give you our reasoning for each.


Following consecutive periods of inflation across Western economies, it is likely that we will see inflation return to normal, or in some cases, we may even see deflation. But what is deflation and how does it work? Deflation is an economic mechanism where the cost of services and everyday products decreases. Longer periods of deflation can lead to rising unemployment, less demand, and economic activity stagnating or reducing. It is not considered something that affects an entire economy and is most likely after a period of high inflation. The IMF expects to see inflation slow down in 2023, which is some good news at least.

Following periods of badly managed economic policies, including external factors such as Russia’s invasion of Ukraine, the price of crucial commodities has skyrocketed in Europe. These countries used Russian oil and gas to fuel homes and businesses throughout the region. When Russia decided to limit this supply due to sanctions imposed on them, inflation entered the double digits in the United Kingdom for the first time in over 35 years. Personal finances, such as savings and investments for retail investors, take the biggest hit with inflation, so deflation may be something we see next year if the situation improves.

Don’t Get Your Hopes Up

Sorry to be the bearer of bad news – it appears as though the economic situation is here to stay for at least another 6-12 months. This is due to a combination of factors, including what we have mentioned above. As well as a lack of business investment, stagnation or negative growth will likely remain on the horizon for quite some time. If there is a governmental change in Western countries, that enacts different policies, alongside a ceasefire in Ukraine, this prediction may be more manageable in the following months.

The R-word – Recession

It feels like we are bringing nothing but negativity to this piece today. Economic growth is a given for those who grew up in the West in the early 2000s, but given the fine balance of disappointing market factors, do not be surprised to see another recession grip America, the UK, and the rest of Europe, at least at some point in 2023.

The UK, the US, and many European nations are generally considered the most affluent nations that regularly operate at the top of the growth rankings. However, given the current economic market sentiment, that focus has now swung away. Although many other countries are feeling the pinch, some economies in Asia are considered to be green shoots that can be used to insulate investments against the poor economic outlook.

The United States will Remain at the Top

Over the last decade, economists have predicted that China will overtake the US in the global economic superpower charts. There was mass agreement that this transition would take place at some point between 2020 and 2030. However, following China’s recent zero-Covid policies, the economy is expected to retract. With the American economy finding its feet again following the 2020 mega shock, these predictions have now been pushed back.

Guyana will Rise

Rising out of economic obscurity, Guyana has never really been considered a country with serious economic potential. That was until a recent oil discovery caused the country to fly to the top of every GDP growth chart. Most economists have put their annual growth somewhere in the region of 50% per year, due to the mega discovery of immense reserves of oil.

Their production of this scarce commodity is expected to spiral over the next few years as oil companies begin to set up in the country and plough vast resources and profit into drilling. Only time will tell whether this will be a good or bad thing for Guyana. Venezuela currently has the greatest amount of oil in the world, but it is one of the world’s weakest economies and one of the most volatile countries, so it all depends on how well this huge discovery is managed.

Market News, News
Andy Watson
Author Andy Watson

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