As last year drew to a close, KPMG’s H2’2021 Global Economic Outlook was published. At the time, I described the previous twelve months as turbulent and uncertain with a constant wave of challenges and threats. Today, we find ourselves in an arguably even more unsettling period. As COVID-19 restrictions gradually eased throughout the world, there was a glimmer of hope that economies could slowly rebuild and return to a period of sustainable long-term growth. The war in Ukraine dealt a hammer blow to international confidence and economic stability, forcing us all to, once again, identify risks and focus on contingency planning and resilience.
It goes without saying that economic forecasting is incredibly challenging in such a profound period of uncertainty, but it remains an effective tool for helping us to plot our course for the next months and years.
In this, the latest edition of KPMG’s Global Economic Outlook, we’ve brought together the expertise of our global organization’s economists, representing seventeen countries and three major regions. Our report focuses on the near-term forecast for 2022 and 2023, recognizing the need for businesses to understand what’s likely to occur in the short to mid-term.
Before the outbreak of war in Ukraine, different territories and regions were at different stages of their post-COVID-19 economic recovery, and that is reflected in the analysis from our Chief Economists. But, while GDP forecasting varies, there are a number of clear, consistent themes and threats facing the entire planet today. Armed conflict may currently be restricted to Eastern Europe, but it’s already having far-reaching consequences for all nations.
Supply chain issues have moved from a post-covid issue to a major immediate threat, with potential shortages in natural gas, metals and grains, among many others. While shortages will impact every territory, we anticipate a disproportionate impact on some of the world’s poorest places and people, compounding long-term challenges for the planet’s collective recovery. Meanwhile, inflation looks set to become a major theme for everyone, raising the threat of a worldwide cost-of-living crisis.
Economic forecasting is not a perfect science, but what KPMG’s Global Economic Outlook does do is shine a light on the path ahead, providing a degree of guidance in an increasingly difficult journey.
Gary Reader, Global Head of Clients & Markets