Global Economy 2022-2023: Recession or Soft Landing?

Imperative to Realign Growth Strategies in the face of Rapidly Evolving Global Economic Sentiment

Fears of a global recession have been compounding in the recent past, with emerging signs of weakness in economic growth and other high-frequency parameters. The Russo-Ukrainian war has weakened global economic sentiment, with aggressive central bank interest rate hikes to curtail inflation also fueling recessionary fears.

To provide decision-makers with improved insight into global economic conditions over the next few months, Frost & Sullivan has developed this thought-leadership piece, delving into the likelihood of a global recession or soft landing, while building visioning scenarios and highlighting growth expectations.

This analysis examines the global economic outlook from a baseline, aggressive, and critical perspective, with various scenario expectations based on Russian gas supply to the EU, global monetary policy, China's zero-COVID-19 policy, and COVID-19 caseload, all of which are critical factors in influencing global economic growth.

While some regions appear to be at a higher risk of a downturn, some economies may be resilient. This research service explores scenario conditions and key growth drivers for major economies. High-frequency indicators, such as inflation and unemployment, were assessed for select economies. The study analyzes the impact of a downturn/recession across the energy, automotive, and healthcare sectors, examining recession exposure versus resilience tendencies of subsectors while correlating global macroeconomic trends to industry impact.

The pandemic saw the emergence and boom of supply chain diversification strategies, the digital economy, the hybrid working model, and the clean energy transition. The study also examines the outlook for these Mega Trends, in the context of the baseline and critical scenarios, and highlights post-downturn trends, which will enable businesses to strategize for emerging growth opportunities.

Key Issues Addressed:

• Is a near-term global recession a strong possibility or just market hype?

• Which regions are more exposed to recession risks and which regions are more insulated?

• What are the critical factors influencing the economic outlook over the next 12-16 months?

• How will the US economy perform in the face of aggressive interest rate hikes?

• What is the outlook for the Euro Area, in the context of Russian gas supply risks and surging inflation?

• How will China's slowdown impact the global economy?

• What is India's expected inflation rate for the next fiscal year?

• How will the O&G and renewables sectors perform in light of evolving macroeconomic dynamics?

• What is the recession exposure versus resilience of light vehicles and electric vehicles?

• What post-downturn trends should businesses capitalize on?