World economy faces more pain in 2023 after a gloomy year

World economy faces more pain in 2023 after a gloomy year

PARIS: This was supposed to be the comeback year for the world economy following the COVID pandemic. Instead, 2022 was marked by a new war, record inflation and climate-linked disasters. It was a “polycrisis” year, a term popularized by historian Adam Tooze. Get ready for more gloom in 2023.

“The number of crises has increased since the start of the century,” said Roel Beetsma, professor of macroeconomics at the University of Amsterdam. “Since World War Two we have never seen such a complicated situation,” he told AFP. After the COVID-induced economic crisis of 2020, consumer prices began to rise in 2021 as countries emerged from lockdowns or other restrictions.

Central bankers insisted that high inflation would only be temporary as economies returned to normal. But Russia’s invasion of Ukraine in late February sent energy and food prices soaring. Many countries are now grappling with cost-of-living crises because wages are not keeping up with inflation, forcing households to make difficult choices in their spending. “Everything has become more expensive, from cream to wine and electricity,” said Nicole Eisermann from her stand at the Frankfurt Christmas market.

Central banks played catch-up. They started to raise interest rates this year in an effort to tame galloping