WEF’s ‘Chief Economists Outlook’ Report

May 2, 2023

The ‘Chief Economists Outlook’ report, which was released recently by the World Economic Forum, aims to provide a brief overview of the current economic situation and highlight key areas where policymakers and business leaders should focus their efforts in response to the shocks caused by geo-economic and geopolitical events.

Benefactors of Current Supply-Chain Changes

The World Economic Forum (WEF) recently conducted a survey to identify the countries that are most likely to benefit from ongoing supply-chain changes. According to the survey, India, Vietnam, Thailand, Indonesia, Mexico, Turkey, and Poland are among the countries that are likely to see significant benefits. The survey also found that regions such as South Asia, East Asia and Pacific, Latin America and the Caribbean, and the US are most likely to benefit from these changes.

Industries Expected to See Pronounced Supply Chain Changes

The leading economists identified several sectors where they anticipate significant alterations in the supply chain, which consist of semiconductors, green energy, automobiles, drugs, food, energy, and the overall technology field.

Global Recession Likelihood

The WEF survey found that 45% of chief economists consider a global recession likely in 2023, while an equal percentage considers it unlikely.

Recent Banking Disruption

Based on the survey, the global perspective has been shaken by the banking disruption that occurred in March 2023. Silicon Valley Bank, one of the most prominent lenders in the world of technology startups, collapsed on March 10 after a run on the bank by depositors. The collapse of a few regional banks in the US, starting with Silicon Valley Bank, has sent ripples across the global banking industry and posed fears of a contagion effect across economies.

Central Banks Face a Trade-Off

Around 80% of chief economists believe that central banks are now in a position where they have to balance controlling inflation and preserving stability in the financial sector. Additionally, nearly the same percentage anticipates that central banks will encounter difficulties in meeting their inflation objective.