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Global macro and geopolitics

Macro matters: Global themes for 2023


The world economy enters the new year on shaky ground. The post-pandemic rebound is losing steam. The Russian invasion of Ukraine and the geopolitical fallout is being felt across the globe. Inflation, rising interest rates and the strong US dollar are impacting countries in every region of the world. Major advanced economies are set to slow – or even contract - in 2023, while the fortunes of emerging and frontier markets are divided between those who can benefit from the current macro environment and those who can’t. 

Given this challenging context, GC’s Global Macro team has analysed some of the key macro trends and policy developments that will shape 2023 – with a focus on themes that present both risks and opportunities for corporates and investors. 

The attached report covers:

  • China’s recovery: Beijing’s zero-covid policy has been a reason for slow Chinese growth and supply chain disruptions elsewhere. China’s re-opening could provide a boost to the global economy – at least if consumers rediscover their willingness to spend.
  • Sovereign debt: the strong dollar and rising rates are raising the prospects for sovereign debt woes in emerging and frontier markets. The challenges are not only rising debt loads and debt servicing costs, but also geopolitical issues. The G20 consensus on debt restructurings could falter. 
  • Labour markets: after the “great resignation”, central bankers hope an economic slowdown could change the dynamics of tight Western labour markets. But given changes in demographics and attitudes, it might not – impacting longer-term inflationary pressures. 
  • EU industrial competitiveness: high energy prices are threatening the EU’s ability to compete. After EU members spent generously to cushion consumers and firms, Brussels is preparing a more forceful industrial policy. But new spending could collide with plans to increase financial stability. 
  • The geopolitics of energy: amid decoupling from Russia, the world’s key energy producing MENA region could be a source of risks rather than new supplies for Europe. The EU will need to look elsewhere for its hydrocarbon needs and remains vulnerable to supply crunches. 
  • Tensions and cooperation in the Middle East: geopolitical conflict and a rising regional threat from Iran are bringing former foes closer together - though only if the region handles longstanding political issues carefully. 

Many of our clients are feeling the impact of the uncertainty related to these and other developments as they look ahead into the new year – we would be delighted to have a conversation about how the Global Macro team can help you navigate 2023 and risk-proof your company or investments.

Download the report

GC Macro Matters

    The views expressed in this report can be attributed to the named author(s) only.