Global economic uncertainties are particularly acute this year, with multiple conflicting forces in play and mixed messages from international financial institutions. On the bright side, inflation is coming down, the US job market remains resilient, the euro zone may avoid a serious recession, and China’s growth is likely to pick up after it abandoned its zero-Covid policy. At the ongoing World Economic Forum in Davos, the International Monetary Fund’s deputy managing director Gita Gopinath signalled that the fund would upgrade its economic forecasts later in January, anticipating that economic conditions would improve in the second half of the year.

But in its Global Economic Outlook published in early January, the World Bank presented a more sobering picture, downgrading its forecasts for 95 per cent of advanced economies and nearly 70 per cent of emerging market and developing economies. In the face of continued monetary tightening, disruptions from the war in Ukraine, weakening economies in the United States, European Union and Japan, and heavy indebtedness in much of the world, it projects global growth at 1.7 per cent this year – the lowest, barring the pandemic year of 2020 and the global economic crisis year of 2008. While China’s growth will pick up with the easing of pandemic restrictions as well as more liberal economic policies, its reopening could be uneven, accompanied by recurring Covid-19 outbreaks and periodic economic restrictions.