Economic outlook for 2023

LAST YEAR’S CHALLENGING CONDITIONS EXPECTED TO CONTINUE

Rising inflation and interest rates made 2022 a challenging year for the economy, both in Australia and around the world.

Economic activity is expected to continue to slow in 2023, as central banks try to control above average inflation figures. It’s predicated global interest rates will keep rising, to help reduce inflation and improve household spending.

It’s also predicted there will be recessions, or periods of negative economic growth, in many major developed markets including the US and Europe. In Australia, the forecast is for a slowdown in growth. A recession could happen too, however it’s less likely than more developed markets. Our inflation levels aren’t projected to be as high as major overseas economies, with the Reserve Bank of Australia (Australia’s central bank) also not expected to raise interest rates in line with other countries.

Consumer and business confidence looking up

Consumer and business activity from the 2022 September quarter shows growth in several areas, with the economy growing by 0.6%, up 5.9% on last year’s figure1. This could be good for future domestic economy forecasts in 2023, especially when compared to overseas.

After more than a decade of strong growth, the world is entering a period of weaker economic growth which may see more modest super returns compared to previous years.

AustralianSuper’s investment team will continue to adjust our investment portfolio as the economy moves. This helps manage risk and allows us to take advantage of investment opportunities with the potential for long-term growth in member returns.