Short-term outlook for cities deteriorates
Many cities in the world’s advanced economies will enter recession in 2023, with soaring inflation and tightening monetary and fiscal policy driving down demand. In contrast, the majority of cities in emerging economies will still enjoy robust economic growth, despite deteriorating global conditions. Nevertheless, we do not expect these diverging short-term trends to have a substantial impact on the longer-term rankings of city economies.
What you will learn:
- The impact of the global recession will not be felt equally across the world. Cities in advanced economies are forecast to show no growth in 2023, whilst those in emerging economies will grow at a far healthier rate of more than 3%—spurred by a recovery in Chinese cities.
- In general, more than half of the world’s advanced city economies will experience a contraction in GDP during 2023—and a further quarter will grow at less than 1%. The same is true for the world’s largest cities such as New York, Los Angeles, London, and Paris, which will not show much (if any) growth. A notable exception will be Tokyo, which will—as a rare occurrence—outperform many of its advanced city peers.
- Among Chinese cities, Shanghai will stage an impressive recovery next year, but this will be driven mainly by a return to growth after Covid-19 lockdowns plagued the city in 2022. Some emerging city economies will post stand-out growth, and in many cities in the developing world, the global recession will feel a world away.
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