Skip to main content


Hitachi Research Institute

Economic Outlook

Latest economic forecasts for Japan, the U.S., Europe, and China, etc

Dec. 2022 Short-term Economic Outlook Summary

Global economy stalling after slowdown in 2023, full recovery delayed to 2024

1.Global: Inflation slows in 2023 but stalls without driving force due to slowdown in the U.S., Europe, and China; full recovery delay in 2024

The global economy in 2023 will stagnate mainly in the first half of the year due to the cumulative effect of interest rate hikes in various countries in 2022 and sluggish activity in China. Energy and minerals prices will peak out due to the global economic slowdown, and inflationary pressures will gradually ease. The tightening cycle aimed at curbing inflation will be completed by mid-year, and economies will enter a phase of waiting for a recovery, but growth will remain weak in the absence of an economic driving force, and a full recovery will be delayed to 2024. Global growth will be 3.3% in 2022 and 2.4% in 2023.

2.U.S.: Economy to grow slowly in 2023 but to avoid deep recession

The U.S. economy will continue to decelerate, especially domestic demand, affected by higher interest rates and prices. Housing market conditions have deteriorated markedly, putting downward pressure on consumer spending and housing investment. Inflation is expected to halt its rise and to gradually decline toward the end of 2023. The FRB is expected to ease the pace of interest rate hikes, with a policy rate expected to rise to the low-5% range in the first half of 2023 before remaining unchanged. The FRB’s rate hikes will keep the U.S. economic growth rate almost flat in 2023. Real GDP growth is forecasted at 1.8% in 2022 and 0.3% in 2023.

3.Europe: Stagflation continuing in 2023, pushing Germany and the U.K. into recession

The Euro area economy avoided entering a winter recession due to natural gas shortages, but business activity stagnated, and consumer spending remained sluggish due to rising electricity prices. The inflation rate will remain high in 2023, and stagflation will continue. In Germany, particularly, production will continue to decline, especially in the materials industry, as electricity prices rise. Household purchasing power will also decline, and the economy fell into recession from the end of 2022. The U.K. has also entered into a recession due to high inflation, rapid interest rate hikes, and austerity measures by the new government. Real GDP growth in the Euro area is forecasted at 3.3% in 2022 and 0.3% in 2023. Real GDP growth in the U.K. is forecasted to be 4.3% in 2022 and -0.8% in 2023.

4.China: Growth slumping to mid-4% in 2023 due to the re-expansion of COVID infections and continued real estate stagnation

In China, growth picked up after the Shanghai lockdown, but economic activity was disrupted by a resurgence of infections beginning in fall 2022, Economic growth will remain sluggish in late 2022 and early 2023 due to the slowdown in activity caused by the increase in COVID infections and weak consumer confidence. The real estate market will remain stagnant for the time being, as the recent supportive measures implemented lack an immediate effect. Improvement in both the consumption and real estate markets will not be confirmed until mid-2023. Growth is forecasted at 3.2% in 2022 and 4.6% in 2023.

5.India-ASEAN: Cumulative effect of interest rate hikes and slowdown in external demand to put downward pressure on the economy, but with growth to remain generally firm

India is expected to continue raising interest rates to control inflation until spring 2023. Although the economy will not stall, the cumulative effect of interest rate hikes plus slowing external demand will weigh on growth in 2023. Inflation will return to within the inflation target range (upper 6%) in the second half of 2023. Growth is expected to be 7.1% in FY2022 and 5.8% in FY2023. ASEAN economies will generally recover steadily, but inflation-curbing interest rate hikes will continue until mid-2023. The risk is the spillover effect of reduced overseas demand due to the economic slowdown in the U.S. and China. ASEAN5 growth is forecasted to be 5.7% in 2022 and 4.6% in 2023.

6.Japan: Consumption and capital investment continuing to recover, supported by economic measures and a lull in inflation

The recent sharp rise in crude oil and raw materials prices and the rapid depreciation of the yen have increased the value of imports and have continued the outflow of income overseas. Economic measures formulated by the government are expected to support the economy through curbing household electricity and gas price hikes from the beginning of 2023. Household savings are accumulating due to benefits and fewer opportunities to go out, and consumption will continue to recover as pent-up demand will emerge as crude oil and raw materials prices settle down as the overseas economic stagnates and the yen reverses from its depreciation. Capital investment is expected to recover due to improved corporate earnings, but the pace of recovery will be slow, due in part to deteriorating business conditions in the manufacturing sector because of declining exports. Economic growth will continue to recover at a moderate pace. Real GDP growth is forecasted to be 1.6% in FY2022 (1.2% in CY2022) and 1.1% in FY2023 (1.5% in CY2023).

World economic outlook

World economic outlook
Note: The figures above are calendar-year based. Accordingly, the figures of Japan are different from the fiscal-year based figures in the table below.
Source: IMF. Forecast by Hitachi Research Institute.

Japan economic outlook

Japan economic outlook
Source: Japan Cabinet Office, etc. Forecast by Hitachi Research Institute.

Back Number

Mar 13, 2024
Jan 10, 2024
Dec 25, 2023
Oct 3, 2023
Jun 26, 2023
Mar 20, 2023
Jan 17, 2023
Oct 13, 2022
Jul 7, 2022
Apr 6, 2022
Jan 18, 2022
Oct 11, 2021
Jul 15, 2021
May 3, 2021
Jan 28, 2021
Oct 16, 2020
Jul 8, 2020
Mar 13, 2020
Jan 14, 2020
Oct 23, 2019
Jul 3, 2019
Mar 18, 2019
Jan 18, 2019
Nov 13, 2018
Jul 27, 2018
Apr 7, 2017
Apr 7, 2017
Sep 14, 2016
Jul 22, 2016
Jul 19, 2016
Apr 4, 2016
Feb 5, 2016
Oct 13, 2015
Jun 30, 2015
Oct 27, 2014
Jun 30, 2014
Apr 3, 2014
Feb 5, 2014
Oct 3, 2013
Jun 6, 2013
Apr 5, 2013
Dec 19, 2012
Sep 24, 2012
Jul 27, 2012
Sep 16, 2011
Jul 21, 2011
Jan 21, 2011
Sep 16, 2010
Jun 10, 2010
Mar 12, 2010
Dec 25, 2009
Sep 1, 2009
Jun 16, 2009
Mar 9, 2009
Dec 24, 2008
Nov 28, 2008
Jun 20, 2008
Mar 31, 2008
Jan 11, 2008
Jan 9, 2008
Nov 26, 2007