South Asia Paying Price For Russia-Ukraine War, India A Bright Spot: The World Ahead 2023 Report

Sri Lanka, Pakistan, and Bangladesh are all challenged as the cost of food and energy has gone up, India is the only bright spot in South Asia, according to The World Ahead 2023 report by The Economist

Higher energy prices have also driven up cost of transportation and fertilizers. ( Image Source :Getty )

As we about to bid goodbye to 2022, 'The World Ahead 2023' report by The Economist has showed some trends and events that will shape the coming year. In this edition, The Economist observes that "after two years in which the pandemic was the force shaping the immediate future, the main driver now is the war in Ukraine. In the coming months the world will have to grapple with unpredictability around the conflict's impact on geopolitics and security; the struggle to control inflation; chaos in energy markets; and China's uncertain post-pandemic path."

The report discusses a broad range of topics in the following. According to The World Ahead 2023, the global economy is slowing and many countries risk falling into recession in 2023.

Tight money has brought about a strong dollar which is exporting inflation to emerging markets and making their hard currency debt harder to service.

Next year will be about battling inflation and economic stagnation. A total of 39 per cent of CFOs interviewed by Deloitte expect America to be in stagflation and 46 per cent expect a recession.

In 2022, McDonalds raised the price of its cheeseburger in UK for the first time in 14 years.

Strong pricing power from strong brands will be needed in 2023.

The super forecasters predict world GDP growth between 1.5 per cent and 3 per cent, expect China to be between 3.5 per cent and 5 per cent.

Britain’s productivity was second best between 1997 and 2007, however it is second worst now between 2009 and 2019.

Turkey has been challenged. Erdogan promised to make it a $2 trillion economy by 2023. Its GDP has fallen from $957 billion in 2013 to $815 billion in 2021. Inflation is at 80 per cent right now.

Americans will be confronted with a choice between two elderly gentlemen (Trump vs Biden) whom neither of their parties want them to run today.

Whenever American inflation has touched 5 per cent, recession has followed in USA, will this year be different? By the end of 2023, America will be climbing out of a mild recession as inflation recedes.

Research shows that stable housing is necessary for health, education, employment and intergenerational prosperity.

South Asia is paying the price for the Ukraine war. Sri Lanka, Pakistan, and Bangladesh are all challenged as the cost of food and energy has gone up. India is the only bright spot in South Asia.

Household debt as a % GDP

• South Korea-105%
• Hong Kong-91%
• Thailand-90%
• Taiwan-88%
• Britain-88%
• USA-80%
• Japan-70%
• Singapore-58%
• India-35%

The war in Ukraine means that Russian influence in the Middle east will wane. Russia is the second-biggest arms dealer behind USA, however, the malfunctioning of its weapons in Ukraine will deter Arab buyers in the future or terms will change.

Between 2020 and 2022, prices of food staples in African countries increased by 24 per cent.

Higher energy prices have also driven up cost of transportation and fertilizers.

Africa is the richest continent in resources but poorest in economic development, Africa needs to use its endowment of green minerals to build an industrial base.

Global warming is a threat multiplier, aggravating poverty and conflict.

With global averages up between 1.1 and 1.3 degrees vs pre-industrial levels, many floods, droughts, wildfires, and heatwaves will be made worse.

America it is said has allies, however China and Russia have clients. Most countries hover between these two camps.

New emerging groupings are expected like the QUAD. Expect I2U2 – India, Israel, UAE and USA.

Virtual reality is like wearing a digital blindfold. Augmented reality superimposes computer generate elements onto your view of the real world. Mixed reality goes a step further by allowing real and virtual items to interact.

In 2023, inflation will hurt shoppers and retailers. Online sales is 14 per cent of all sales today, it was 10 per cent on 2019, its growth as percentage of total sales might be flat in 2023.

Oil price $ per barrel

• 2019 62$
• 2020 47$
• 2021 73 $
• 2022 100 $
• 2023 87$

Apple’s move to allow people to block a third party from collecting their data will keep digital advertisers on their toes.

Large companies are finding it difficult to remain neutral on political and social issues. They feel investor pressure from above, employee pressure from within and consumer pressure from all around to be public in the way they articulate and defend their values.

People worry about robots taking their jobs, however, none of the countries that have adopted robots on a large scale – Germany, Japan, South Korea, and Singapore have a problem with unemployment.