• India will lead economic growth worldwide for at least two years, closely followed by China. Overall, its an era of growing prosperity for Low-Income Developing Countries as well as Emerging Market and Middle-Income Economies.

• While virtually every advanced economy (i.e., the U.S., the Eurozone, Canada, the U.K. et al) will struggle to grow over the next year, only the U.K. is expected to contract in 2023 and bounce back with growth in line with other advanced economies in 2024.

• Oil and commodities are expected to have a substantial shrinkage in prices over the course of 2023, which will carry over to some extent in 2024. If true, this will (of course) bring some relief to the average consumer.

The growth of India is an interesting paradigm. Unlike China, India is by no means a crucible for manufacturing goods destined to be consumed in the Western Hemisphere. Like India, large swathes of the economies in Low-Income, Middle-Income and Emerging Market countries do not subsist on exports to the Western Hemisphere either. China’s growth in the nineties was largely fueled by the shift in manufacturing from the West to the East.

In the era of « globalization, » the U.S. effectively became the « prime consumer » while China became the « prime producer. » As some contrarian economists had concluded circa Q4 2022, globalization is effectively under pressure while localization is growing. All in all, it’s very likely that we shall witness some very interesting evolutions and alignments in both geopolitics and macroeconomics over the course of this decade.

This update is rather interesting given that it’s from an institution that effectively has « skin in the game » in global geopolitics and macroeconomics which is a little different from that of, say, an investment bank or a financial services firm. The latter do have some interest in downplaying market risks to retain transaction volumes which, in turn, generates revenues. While it would be unfair (and impossible) to state that their forecasting is compromised, an « understating » of market-adverse events is a natural assumption for one to make. Of course, it bears remembering that neither set of forecasters have been right 100% of the time.

Lowering consumption patterns in the « prime consumer » – the U.S. – has been imputed for sometime now. Those with « skin in the game » in consumption are the likes of digital payments firms and credit providers. The results of a survey jointly conducted by payments and commerce platform PYMNTS as well as credit provider LendingClub Bank was released near the end of January, which uncovered some very problematic consumption patterns in the U.S. as of December 2022.

The survey has been conducted periodically over a number of months since mid-2021 and indicates a troubling pattern: an increasing number of people earning above $50,000 are reporting that they’re now living « paycheck to paycheck », i.e. with no substantial savings put aside either as investments or in the form of spare cash after necessary expenses are accounted for.