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World Economic Prospects

Each month Oxford Economics’ team of 250 economists updates our baseline forecast for 200 countries using our Global Economic Model, the only fully integrated economic forecasting framework of its kind. Below is a summary of our analysis on the latest economic developments, and headline forecasts. To access the full report (and much more), request a free trial today.

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The worst of the global downturn may be over

• We have left our forecast for world GDP to grow by 1.3% this year unchanged for a third consecutive month, as the steady stream of downward revisions over much of last year has halted. Our 2023 outlook is still weaker than last year’s likely 3% gain, but we expect the trough in quarter-on-quarter world growth was in Q4 last year and believe growth will improve in 2023.
• Although economic data continue to paint a relatively downbeat picture, it doesn’t suggest that economies are entering a deeper slump. Indeed, given the raft of adverse shocks last year, the world, and Europe in particular, seemingly ended last year in a resilient fashion.
• While we continue to expect most of Europe, along with the US and Canada, will fall into recession, factors such as the recent resilience demonstrated by economic data, easing headline inflation, and reduced risk of winter energy rationing in Europe all point to reduced downside risk regarding our advanced economy forecasts for this year.
• Meanwhile, although our Chinese GDP growth forecast for 2023 is little changed from a month ago, the ending of the country’s zero-Covid policy has prompted us to shift our expectations for the shape of growth in 2023. Compared to last month, we have lowered our Q4 growth forecast for China in response to the soft tone of recent data and have also reduced our expectations for growth in Q1 as a result of likely additional Covid-related disruptions.
• However, these downgrades have been offset by stronger growth in China over the remainder of the year. This isn’t enough to raise the calendar year growth forecast, but in levels terms, we have increased our end-2023 GDP forecast by about 0.7%.
• In all, we still think that the world economy will likely fall into recession this year, but we now expect the weakest quarter-on-quarter growth for world GDP in Q4 2022. We also think that the balance of risks is less tilted to the downside and believe that the risks of a substantial global economic slump have diminished over the past three months.

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