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Kavan Choksi Shares Insights About Thriving In A Potential Economic Recession In 2023

by Wanda Rich
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Kavan Choksi Shares Insights About Thriving In A Potential Economic Recession In 2023

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Kavan Choksi Shares Insights About Thriving In A Potential Economic Recession In 2023

Are you worried about the potential economic slowdown in 2023? 

What do you do when times are tough and resources are scarce? How can you overcome a difficult period and come out on top?

Between a global banking crisis and dim outlook on the economy, navigating today’s financial landscape can be an uphill battle. But with financial turmoil upon us and an economic slowdown on the horizon, many nervously await for what comes next. >Kavan Choksi (カヴァン・ チョクシ), a successful investor, business management and wealth consultant, shares his thoughts on how investors can weather the storm and thrive in these uncertain times. By leveraging his broad financial knowledge, deep insight into investment strategies, valuable business acumen, and decades of professional experience from around the world, he’ll offer innovative ways to manage your finances so that not only will you be able to achieve stability and capitalize on potential opportunities for future portfolio growth. 

Senior United Nations economists warned of an impending economic downturn with far-reaching impact. Choksi explains that a combination of four factors largely drives the grim outlook: Ukraine’s ongoing conflict and its repercussions on food and energy markets, the coronavirus pandemic, which has had sweeping implications for global health as well as economies around the world, stubbornly high inflation rates that have yet to be tamed and, the dramatic impact of climate change. This convergence has left economists forecasting global growth at only 1.9% this year- a severe drop from previous levels if accurate projections hold (source: United Nations).   

The global economy is facing a mixed bag of dynamics.

The current global financial climate is a complex amalgamation of shifting economic forces. Major implications are being felt on the world stage, from volatile markets to rising unemployment rates and overall uncertainty in various sectors. It’s an evolving landscape with real consequences for people around the globe – making it essential to track these changes and explore their impacts in the future.

Ingo Pitterle, Senior Economist at the UN Department of Economic and Social Affairs (UNDESA), anticipates declining private spending and investment amid rising inflation rates.  (source: United Nations)While we have experienced middling recessionary trends during the earlier half of the 2021 to 2024 economic cycle – growth is expected to return over time. An upswing could emerge as early as the second half of 2023.

Amidst recovery from a global pandemic, war, and extreme climate challenges, the economic outlook is bleak. Global growth could rise to 2.7% by 2024, but significant difficulties remain in achieving this optimistic recovery projection from multiple overlapping crises over the past few years.

The World Economic Situation and Prospects 2023 paints a tentative picture of the near-term economy. While global growth is projected to rise moderately in 2024, achieving this outcome relies on timely monetary policy shifts, progress regarding the conflict in Ukraine, and avoiding further supply chain disruptions.

Where is the Global Economy heading in 2023?

According to Choksi, despite recent challenges resulting from central bank rate increases meant to combat inflation and the conflict in Ukraine, the global economy is expected to maintain modest growth through 2024. Forecasts from October 2022’s World Economic Outlook (WEO) anticipate that between 2023-2024, the world will see an estimated rise of 0.2 percentage points with 2.9 percent followed by 3.1 percent, respectively – which remains below historical averages but higher than previous predictions for both years (source: World Economic Outlook WEO)).

The global economic implications of the pandemic have been far-reaching, and although growth in China saw a setback due to COVID-19’s rapid spread earlier this year, an expedited reopening has set up positive conditions for recovery. Inflation is forecasted to decrease from 8.8 percent in 2022 down to 4.3 percent by 2024 – higher than pre-pandemic levels of 3.5 percent that was observed just two years prior.

Choksi mentions that at the recent Davos, Switzerland summit, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated that China had improved its potential to promote global growth. However, she voiced caution in light of many intersecting crises, such as those related to climate change and escalating levels of debt – with both the World Bank and senior UN economists predicting a drastic deceleration from 3% last year down to 1.9-1.7%, which would be one of this decade’s lowest rates on record.

With two-thirds of economic experts foreseeing a global recession, the World Economic Forum’s Chief Economists Outlook: January 2023 has revealed some cause for hope. 18% consider an economic downturn to be “extremely likely,” more than double that from just three months ago; however, there may still be room for optimism as easing on the cost-of-living and energy crisis look to create potential respite(source: World Economic Forum Geo Economics).

How can economies pivot to resilience and stay profitable and sustainable?

As predicted by leading industry economists, 2023 has brought on turbulent times. According to the Forum’s Chief Economists Outlook survey almost one in five respondents expected an imminent global recession this year. This alarming figure is more than double what was reported only six months ago. Global growth prospects remain anemic, and global recession risk remains precariously high – highlighting just how challenging these upcoming business conditions could be. Nevertheless, it isn’t all doom and gloom; when posed with this sobering information on headwinds businesses will face throughout 2023, many experts offered up sources of optimism and potential solutions, providing glimmers of hope that can help weather whatever challenges lay ahead.

Choksi stresses that despite the current state of affairs, there is hope for an eventual upswing. According to our chief economists’ assessment in their briefing, the impact and duration of this downturn are anticipated to be relatively mild – a sign that we can look forward confidently toward future stability.

Businesses are entering an unprecedented economic landscape where high rates, geopolitical tensions, energy insecurity, and sundry supply chain issues will all impact the bottom line. Innovation is a must to increase resilience in this chaotic atmosphere – but CEOs need more than steadfastness alone: they require shrewd acumen if their enterprises are to thrive in these testing times. To do so demands courage and risk-taking but ultimately, it’s up to them to chart a course through turbulent waters that leads towards success for their company.

Companies need to be ready for the long haul. Although a recession likely won’t last more than nine months, economic recovery can take up to nine years which means businesses must stay agile and resourceful during this transition period. Choksi notes that many organizations have positioned themselves with strong balance sheets that will help them endure any immediate downturns in the market; however, when conditions improve, they’ll also require enough capitalistic infrastructure, such as labor and technology, along with an adaptive strategy as we move into what’s expected to become the new normal, post-pandemic. It is evidenced by continued hiring and investment activity even while facing difficulties elsewhere – signaling their intent toward sustained success.

Kavan Choksi is a successful investor, business management and wealth consultant. He works strategically with companies across fast-moving consumer goods, retail, and luxury markets — he leverages his vast experience to help clients turn around and revitalize their businesses. With his expertise in economics and finance, Kavan has developed a passion for investing over the years and enjoys helping others do more with their money. He provides thoughtful commentary to publications such as Authority Magazine, Business Insider, CEOWORLD Magazine, International Business Times,  The Epoch Times, Forbes, Fox Business Financial Express and Money Magazine. Kavan is also a regular contributor to Nasdaq, sharing his expert insights on what’s moving markets and the global economy.

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