2023 in a Global Perspective: What to Pay Attention to in the Year Ahead

2023 in a Global Perspective

By Emil Bjerg

Collins Dictionary recently coined ‘permacrisis’ as the word of the year, a word that the dictionary defines as “an extended period of instability and insecurity”. As we leave 2022 and enter 2023, there are plenty of sources of instability as well as insecurity. There are escalated conflicts, such as Russia’s invasion of Ukraine, and there are conflicts that can move closer either towards solutions or towards escalations such as the conflicts in Kosovo and Taiwan.

This article looks closer at how we exit 2022 and what to pay attention to in the year that’s
just starting.

What is global forecasting and why is it of interest to businesses?

Global forecasting is the process of making predictions about future events or outcomes that are likely to impact a global scale. Businesses pay attention to global forecasting because it can help them understand and prepare for the economic, political, and social trends that are likely to affect their operations on a global level.

For example, a business with international operations might use global forecasting to predict exchange rates, assess the potential impact of geopolitical tensions on its supply chain, or anticipate changes in consumer behavior due to economic conditions in different countries. By understanding the factors that are likely to affect their business on a global level, businesses can be better prepared to adapt to changing market conditions and make informed decisions about how to allocate resources.

Global forecasting can also help businesses identify opportunities for growth and expansion
in new markets, as well as potential risks to their operations. By staying attuned to global trends, businesses can position themselves to take advantage of new opportunities and minimize the impact of potential challenges.

Overall, global forecasting is an important tool for businesses that operate on an international
level, as it helps them stay informed about the trends and events that are likely to shape their operations in the future as well as to make informed decisions about their products, services, and investments.

The Russian invasion of Ukraine

There’s no doubt that Russia’s invasion of Ukraine will continue to have an enormous impact in the year to come. In 2022 the war had consequences on everything from inflation to energy scarcity to the impacts of Russia’s hybrid warfare to driving up military budgets in European countries and the US. In 2023 the war will continue to impact the world in unforeseen ways – we’re still to discover how, but it’s clear that the results on the battlefields in Ukraine will determine more than just the future of Ukraine.

Defence editor at The Economist, Shashank Joshi, lays out three scenarios for how the war
could play out in 2023 and writes that the best one for Ukraine is also the most dangerous.

In the first of his scenarios, Russia gains ground after an unimpressive start and manages to
win on the battlefield.

More likely, according to Joshi of The Economist, is the second scenario of stalemate, a scenario continuing what we’ve seen in the last months of 2022.

The third scenario Joshi paints is one of continuous momentum and progression for the Ukrainians on the Eastern front. Putin’s reaction to Ukrainian success in 2022 shows why this is the most dangerous of the scenarios: his response has been terror strategies and atomic threats.

A range of factors, internal and external to Russia and Ukraine will be major and probably
desicive factors in how the war plays out. Internally in Russia, Putin has already experienced the rage of mothers protesting against the mobilisation of their sons. A continuous mobilisation and a long raging war will make it even harder for Putin to justify his ‘special operation’ in 2023. Russia is also becoming increasingly dependent on trade with India and China to finance the costly war and will need their relative goodwill in the year to come.

While a substantial part of Ukraine’s surprising ability to drive back Russia has to do with
enormous courage and ability within the Ukrainian army, the occupied country also finds itself in an existential dependence on Western military aid. That means a global recession could set them back enormously on the battlefield as the ability and will to help in European countries and the US can dwindle very fast under such conditions.

Serbia and Kosovo

2023 will also be a deciding year for Kosovo, who’s been facing increasing pressure from its bigger neighbour, Serbia, throughout 2022. After intensifying the conflict throughout the year, 2022 ends with a declaration from the EU, Nato, and the US for both parties to seek de-escalation of the conflict. However, the current climate of war in Europe could tempt Serbia, a historic ally of Russia, to attack Kosovo, a country that many Serbs don’t recognize as an independent country.


2022 also ended dramatically in the South China Sea as an American and a Chinese plane came close to crash. 2022 has been a year of cold war heating up between China and the US over Taiwan. While China sees Taiwan as a part of China and seeks reunification, the US has made it clear that they’re willing to go to war for Taiwan’s independence.

China’s declining form could put Taiwan at a higher risk of an attack in 2023 as China might
use Taiwan as a scapegoat to remove attention from their declining growth rates. However, a Chinese invasion could also have serious diplomatic and economic consequences for the invaders, which might prove a stabilising factor in the year ahead.


China has come out of 2022 in bad shape. While most bigger economies were able to bounce fully back from the corona crisis by the beginning of 2022, the year that comes to an end might have been the most critical corona year in China.

Xi Jinping’s zero-Covid policies, in combination with ineffective vaccines, have proven

disastrous for the economy and recently also for the political and social cohesion as
demonstrators recently took to the street. The social contract between China’s rulers and its population has been that as long as the state can continue to lift people to higher levels of wealth, the population will generally accept low levels of freedom of speech and expression. The end of 2022 showed cracks in the social contract as rare protests took place in the bigger cities on the East Coast. The protests against China’s very extensive Corona measures have an effect as the zero-Corona policies were softened in the wake of the protests.

In 2023, it’ll be worth paying attention to whether the population will continue to raise new
demands to their leaders through protests and whether Xi Jinping’s leadership will continue to meet the demands of the population.

The US

2023 will also be the year that bridges the current state of American politics with the 2024 Republican primaries and the subsequential presidential elections taking place the same year. That means it’ll be the year we will know the central candidates and continue to get clearer indications on favourites for the 2024 – 2028 period. After a surprising, relative success at the midterm elections, Biden looks encouraged to try for re-election and will make an announcement early in 2023

It’s a divided Republican party following a disastrous midterm election for Trumpism. Still
Trump recently announced his presidency. However, as we enter 2023, it’s Ron DeSantis that looks like the future of the Republican party. A candidate that’s said to share many values with Trump, but differs from his Republican party mate by having a more professional focus on politics rather than personal attacks. As is the case for Biden’s potential re-run, 2023 will also disclose whether DeSantis will be a candidate in the 2024 elections.


2022 has been a testing year for the EU, especially because of Russia’s invasion of Ukraine, but the U.S. Inflation Reduction Act, an act that subsidies made in America products, means that EU and European countries leave 2022 with concerns towards both East and West.

2023 will define the future of US – EU relations, as the year will disclose whether the
EU will follow the American protectionist line and make a “‘Buy European’ act” including a heavy subsidy system as Macron has proposed.


Most experts believe that 2023 will bring some form of recession, but there’s disagreement regarding severity and timing. In a recent survey 98 percent of the participating CEOs said that they expect a recession to hit within 12 to 18 months.

Recessions tend to be much more unexpected, however. As Mark Zandi from Moody’s

Analytics recently said to CNN: “Usually recessions sneak up on us. CEOs never talk about recessions”.

2023 will most likely disclose whether a year of inflation will be out in recession, or whether
the interest hikes from the European Central Bank and the Federal Reserve can break the inflation without creating a recession.

As we exit an unpredictable year of ‘permacrisis’ and enter 2023, we cross our fingers for a good and prosperous year.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.