Top Themes of 2023

The economics teams looks back at the most significant stories we covered during 2023.

Editor’s Note: In our last full issue of the year, we look back at the most significant stories we covered during 2023.

Ducking Punches

If we were to describe in one word the state of the global economy over the course of 2023, it would be “resilience.”

At the start of the year, a global recession felt assured. But despite aggressive interest rate increases, a banking crisis and adverse geopolitical developments, the global economic expansion has continued. The U.S. economy actually seemed to gain strength in the middle of the year; while European economies are more sluggish, the bloc has been able to avoid an outright recession. The Japanese economy grew robustly enough to end decades of deflation. Healthy consumer finances amid tight labor markets and excess pandemic savings have been the key supports in the developed world.

Real GDP Growth

Emerging markets (EMs) have also displayed surprising resilience to the very challenges that have often proven detrimental to their economic health. Most EMs have been able to withstand higher energy and food costs, aggressive monetary policy tightening in developed countries and increasing supply chain realignment. The early response of emerging economy central banks to the threat of rising inflation, coupled with improved external and fiscal buffers, have prevented them from slipping into financial turmoil. China is struggling, but has thus far managed to limit spillovers from the real estate downturn to the broader financial sector.