Trends expected to shape the world in 2023

Russia - Ukraine War

Energy prices, inflation, interest rates, economic growth, and global food shortages are expected to depend on how the Russia-Ukraine conflict develops in the coming months. According to The Economist, the immediate outcome is likely to be a stalemate. Moscow is believed to continue its campaign in the neighboring country, hoping that energy shortages and political changes in the US will weaken Western support, especially military aid to Kiev.

America divided

Although former President Donald Trump's Republican Party did not perform as well as expected in the midterm elections in November 2022, they regained control of the House of Representatives from the Democratic Party of current President Joe Biden. This is expected to help the Conservatives make it difficult, overshadowing Mr. Biden's upcoming agenda in the last two years of his term.

In addition, the divisions in American politics and public opinion over abortion, gun rights and other hot-button issues are expected to continue to grow after a series of controversial Supreme Court rulings. Mr. Trump's official entry into the 2024 presidential race is likely to "add fuel to the fire".

The risk of recession threatens the world

Observers say major economies will fall into recession as central banks raise interest rates to curb post-pandemic inflation, which is being further impacted by high energy prices.

The US recession is expected to be relatively mild, but it will be more severe in Europe. The pain will be global as the strong dollar hurts poor countries already hit by soaring food prices.

Simmering hotspots

According to many analysts, in addition to the Russia-Ukraine war, the world also needs to be "cautious" about the explosion of some smoldering hot spots in other places. These include tensions on the Korean peninsula as Pyongyang is stepping up missile launches; "The powder keg waiting to explode" in Kosovo, a province that separated from Serbia in 1999 and declared independence in 2008; US-China tensions over many issues, including Taiwan; China-India clashes in border areas, in the Himalayas...

Alliances are changing

Amid geopolitical upheaval, the world may see a corresponding shift in alliances. NATO, which was revived by the crisis in Ukraine, will welcome two new members. Saudi Arabia will sign the Abraham Accords, an agreement to normalize diplomatic relations and promote peace among Middle Eastern countries.

Other alliances of increasing importance include the Quad of the US, Australia, Japan and India; AUKUS of the US, UK and Australia; and I2U2, a forum linking India, Israel, the United Arab Emirates and the US.

The recovery of world tourism

The phrase “revenge tourism” will still be mentioned a lot in 2023, marking the increase in people traveling to make up for the time restricted and isolated due to the Covid-19 pandemic. World tourism is expected to recover more strongly in 2022, when China finally reverses its “No Covid” policy and begins to reopen to international tourists from January 8.

Outbound travel by Chinese citizens, which has dropped to almost zero over the past three years, will be allowed to resume along with the lifting of limits on the number of international passenger flights.

Impact on the global fight against climate change

Due to the energy supply crisis, some countries have turned back to fossil fuels, which are considered less environmentally friendly. At the UN Climate Change Summit (COP27) in November 2022, oil-producing countries blocked calls to phase out fossil fuels, even as the goal is to limit global temperature rise to 1.5 degrees Celsius.

However, in the medium term, Western countries, especially European Union (EU) member states, will accelerate the transition to renewable energy as a safer alternative to hydrocarbon fuels.