This year’s meeting took place at a difficult time as the war in Ukraine, the energy crisis and high inflation have created serious problems in most of the world’s economies
The Davos experienced again this year, after a forced interruption of three years due to the coronavirus, the glamor of the meeting of leading politicians, businessmen and academics from all over the world for the meeting of the World Economic Forum.
The outlook for the global economy was, as in previous years, the main topic of discussion in the numerous panels, along with the perennial topic of climate change and geopolitical issues, which this year were given special emphasis due to the Russian invasion of Ukraine.
This year’s meeting took place at a difficult time as the war in Ukraine, the energy crisis and high inflation have created serious problems in most of the world’s economies.
However, the positive developments of the last 1-2 months, such as the significant reduction in energy and especially natural gas prices, the resilience shown by the European economy, the slowdown in price growth and the gradual restart of the Chinese economy after the lifting of the restrictive measures for the corona virus, caused a moderate optimism for the future.
The head of the major investment firm Fidelity International, Anne Richardsgave the stamp of what was discussed, saying that those who went to Davos probably leave with a slightly more positive view of things.
The managing director of the International Monetary Fund, Kristalina Georgieva, described the outlook for the global economy as less dire than feared 1-2 months ago, but stressed that “less bad doesn’t mean it’s good.” She highlighted the improvements that have come from lower inflation and the opening of the Chinese economy, but added that the 2.7% growth rate of the global economy forecast for 2023 is the third slowest in decades. “Be careful not to go the other side of the spectrum, from being pessimistic to being very optimistic,” he said.
On January 31, the IMF will announce its new forecasts for the global economy, with its deputy director general, Rita Gopinathto leave open the possibility of a small upward revision for 2023 as, as he said, prospects for recovery are evident from the second half of the year.
The president of the European Central Bank spoke about the prospects of the European economy, Christine Lagardeand the vice-president of the European Commission, Valdis Dombrovskiswith both making it clear that the big fears are gone.
“The news has been much more positive in recent weeks. It won’t be a brilliant year (in 2023) but it will be a lot better than we feared,” Lagarde said. He made clear, however, that inflation in the Eurozone remains very high, despite easing in December to 9.2%, and that the ECB will continue raising interest rates through 2023. The central bankers of France and the Netherlands, Villeroy de Gallo and Claas Knott, recalled Lagarde’s statements on December 15 that interest rate hikes would be 50 basis points (half a percentage point) and more than two. The restart of the Chinese economy, the ECB chief said, would be positive for China itself and the rest of the world, but would add to inflationary pressures in Europe because it would tend to push up oil and gas prices due to increased demand.
The Commission vice-president said the EU would likely avoid even a technical recession, meaning two consecutive quarters of negative growth. “Since the fall we have seen some positive signs,” he said, “such as the larger-than-expected reduction in energy prices because our warehouses were full at the beginning of winter,” noting the mild weather that helped this development.
The German Chancellor, Olaf Solz, said he was confident that there would be no recession in his country, which until recently was considered the weak link in the Eurozone, due to its heavy dependence on Russian natural gas. Accordingly, the French Minister of Finance, Bruno Lemairesaid that a recession of the French economy is not foreseen.
RES-EMP
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With a wealth of experience honed over 4+ years in journalism, I bring a seasoned voice to the world of news. Currently, I work as a freelance writer and editor, always seeking new opportunities to tell compelling stories in the field of world news.
