Global Economy: Due to prolonged inflation that is probably reducing, global economic growth is anticipated to slow down in 2019. With the possible exception of China, the main economies will lose the economic benefit from easing Covid-19 limitations. Major central banks will continue tightening monetary policy to combat inflation while governments won’t be implementing significant stimulus measures. In October, the International Monetary Fund predicted that, aside from the global financial crisis in 2009 and the initial Covid-19 shock in 2020, global GDP growth would fall to 2.7 percent in 2023 from 3.2 percent in 2022.
U.S. Economic Statecraft in Asia: The success of the Indo-Pacific Economic Framework for Prosperity (IPEF), a policy initiative of the Biden administration, will be put to the test in the following year, along with the White House’s larger economic and Asia-related policies. As the administration looks to produce at least some tangible results before mid-November, when President Biden will welcome other leaders of the Asia-Pacific Economic Cooperation (APEC) forum to San Francisco for their annual summit, the pace of IPEF talks is likely to pick up after the first full round of negotiations in Brisbane this month.
Export restrictions on technology: Over the course of the upcoming year, export restrictions will become more prevalent as the Biden administration places a greater emphasis on safeguarding and advancing vital technologies in the context of escalating strategic competition with China.
The Biden administration issued export restrictions on October 7 in an effort to prevent China from obtaining cutting-edge semiconductors and the machinery needed to create them. The action signified a paradigm shift in U.S. export control strategy: controls would now be utilized to assure the United States maintained “as large of a lead as possible,” rather than allowing rivals to advance technologically at a safe distance behind it.
Infrastructure and Development Finance Policy: The Partnership for Global Infrastructure and Investment (PGII), IPEF, the Blue Dot Network (BDN), the Trilateral Infrastructure Partnership (TIP), and the Quadrilateral Security Forum are just a few of the infrastructure-related initiatives that will continue to be a central part of the Biden administration’s foreign policy in 2023. (Quad). These initiatives aim to rival China’s Belt and Road Initiative while also raising the bar for good infrastructure.
Climate Finance: Expect increased efforts in 2023 to increase investment in climate mitigation and adaptation globally, as the Inflation Reduction Act has mobilized investment in clean energy domestically. The funding and operation of the “loss and damage fund,” which was unveiled at the UN Climate Change Conference (COP27) last month, as well as the fund’s connection to the Paris Agreement’s climate finance commitments, as well as the function of international financial institutions in financing for climate and other “global public goods,” remain major open questions. The multilateral development banks are being urged by many shareholders and outside experts to increase lending and promote greater private investment, notably in the context of Just Energy Transition Partnerships (JETPs)
