Many experts predicted, after the Russia-Ukraine war, that 2023 would be apocalyptic, with a deep recession hitting the world’s main economies.
But economic data from the end of last year is dispelling those fears. There will definitely be a recession in 2023, but possibly not as sharp as those post-war predictions.
The effects of monetary policies are making themselves felt. As of December 2022, in almost all European countries inflation fell between 0.4% and 1.4%. In the United States too, registering 6.5%.
In addition, commodity prices have registered between strong and moderate reductions. For example, oil, whose projections were above US$100 a barrel by the end of 2022, closed at US$75. And natural gas, whose price tripled in the middle of last year, nearly equals the prewar price. Food is also giving way and freight rates have returned to their levels of a year ago.
These inflation figures suggest that new rate increases, especially from the Fed and the ECB, could moderate in the future.
Other data of interest: The S&P 500 is close to 4,000 points and unemployment in the United States fell again to 3.5% in December. It also fell in the euro zone to 6.5% (an all-time low) although it remains high in some countries. From 3% in Germany to 12% in Spain.
Growth in 2022 contracted in almost all countries, falling to less than half that registered in 2021. But at a level that cannot be classified as a deep recession, as predicted. Growth in the United States in the third quarter registered a year-on-year rate of 2.4%, rebounding compared to the second quarter, and the European Union at 2.6%, both above what was forecast months ago and with a better-than-expected December in sales.
However, the annual profits of the banks fell and the projections for 2023 foresee a strong economic contraction, with higher interest rates. In addition, financial conditions will tighten, the real estate sector will suffer a sharp decline, and the war will continue to rage.
The Dominican Republic will close 2022 with good growth (5%-5.2%) and prospects of 4.5%-5% in 2023, but inflation in December rose to 7.83% year-on-year, which is bad news. I already said it, you have to tighten the nut.
And you, reader friend, press yours.