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2023 Outlook on the Regional Economy: Impact on Business Landscapes in the APAC Region

Insights from the keynote speaker at the MBA CSEA Asia-Pacific conference. 
by Marie Bergeron, MBA CSEA 2023 APAC Conference Committee member and Director, Career Development at Rice Business School
 
Mr. Sumana Rajarethnam, Director of the Economist Intelligence Corporate Network, South-East Asia, began his presentation by stating that the global economy seemed to be in better shape than anticipated.  However, he warned that longer-term challenges remained. Factors impacting the economy currently are:
  1. The Resilient Global Economy – so far! The US and EU avoided recession, China's consumer spending has rebounded, and there have been improvements across both developed and developing economies.
  2. Inflation is Falling, but Slowly. Prices are falling, but slower for hard goods than for soft ones. There is renewed demand from China. Interest rates remain high as banks deal with debt and bank failures.
  3. People are Still Spending! Tourism and the services sector have rebounded, and the labor market remains tight and healthy, giving consumers staying power. There is revenge buying going on!
  4. Geopolitics and Protectionism. We are experiencing a new era for defense and energy, given the conflict in the Ukraine. There have been export bans on strategic resources, new supply chains, and weaponization of finance and technology.
  5. The Return of China. Covid peaked sooner than expected, and China is exercising its pent-up demand. A strong rebound for China is expected.
 
Sumana also listed the top ten risks for the global economy:
  • Deteriorating ties between China and the EU/US
  • High interest rates may lead to global recession
  • New, highly aggressive variant of Covid-19 may emerge
  • Europe may face a new energy crisis
  • High inflation could fuel social unrest
  • Warn in the Ukraine could turn into a global conflict
  • China may re-impose a zero-Covid policy
  • Cyberwarfare may erupt
  • A possible conflict between China and Taiwan might erupt
 Overall, it was an insightful session, and attendees benefited from learning about the marco trends that will impact businesses in Asia-Pacific and beyond.

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