The global economy has proven resilient so far in 2023, despite strong headwinds, mostly related to the ripple effects from the war in Ukraine and high global inflation, the Economist Intelligence Unit has revealed.

According to its latest Global Economic Outlook 2023 Update, it said Europe avoided a deep recession in the winter of 2022/2023, in part owing to warmer than usual temperatures and to the rapid switching to alternative energy sources following Russia’s decision to turn off gas flows.

Again, it pointed out US consumer spending has also held up better than EIU expected, with the labour market and consumer spending strengthening further in early 2023.

Finally, the UK-based organization noted that China’s exit from the government’s zero-Covid policy has also supported global activity.

“We, therefore, expect global growth to stand at a modest—but not anaemic—2.1% in 2023”, it added.

Growth for 2023 still represents a slowdown

Continuing, EIU said despite the brighter outlook, the growth of 2.1% in 2023 would still represent a slowdown.

“The full-blown war in Ukraine is affecting the global economy via higher commodity prices, supply-chain disruptions and Russia’s weaponisation of energy supplies. This situation will persist throughout 2023 (and probably beyond), as we expect the war to become a protracted conflict with no clear resolution”.

“The economic impact of the war is being felt especially strongly in Germany and central Europe, where energy intensive industries will struggle to remain competitive”, it added.

 In the US, the EIU said it still expects annual growth to slow sharply this year, to only 1%, as the pace of consumer spending becomes unsustainable in the face of high inflation and a steep rise in interest rates. In China, the initial rebound in consumer activity after the lifting of the government’s zero-covid policy has been strong. However, China’s recovery has fallen short of expectations.

In Africa, the EIU projected a GDP growth rate of 2.7%.

Many international organizations have however projected that Ghana’s economy will grow between 1.8%-2.4% in 2023.