VITAL STATISTICS

THE BEST STRATEGY TO SURVIVE THE ECONOMIC VICISSITUDES AHEAD THIS YEAR MAY BE TO ADOPT THE BRACE POSITION. THAT IS, METAPHORICALLY, WHAT MANY BUSINESSES ARE DOING AS THE INDICATORS AND FORECASTS POINT TO A YEAR THAT WILL TEST THE RESILIENCE OF BRITISH COMPANIES IN EVERY SECTOR AND OF EVERY SIZE.

+2.7% -0.4%

This is the likely growth in global GDP in 2023 according to the latest forecast by the International Monetary Fund. That is slightly below its previous prediction, in the summer of 2022. Kristalina Georgieva, the IMF’s managing director, recently indicated the increasing likelihood that growth may fall below 2%.

The OECD forecasts that the UK economy will shrink slightly - by -0.4% - in 2023, the worst performance in the G7 group of nations. Germany’s GDP is expected to decrease by -0.3%. The British Chamber of Commerce forecasts that the UK economy will return to growth in the fourth quarter of this year. Guyana, the world’s most dynamic economy, is expected to grow its GDP by 25% by 2026.

-3% 70%

The projected fall in investment by British business in 2023, according to the British Chamber of Commerce’s latest forecast, is -3%. Alex Veich, director of policy at the BCC, says: “Very few firms will be willing to invest as they face a wall of higher prices, interest rates and taxes.” The fall is significant but not catastrophic, especially as he expects investment to increase in 2024.

Seven out of ten medium-sized British companies are optimistic about the outlook for the next 12 months, according to a survey by insurance group RSA. This represents a significant bounce back since the summer when corporate confidence was low and may reflect the fact that, with inflation falling and less pressure on the cost of energy and materials, companies feel they can tough it out until growth returns.