Prannoy Roy, Ruchir Sharma On Top Economic Predictions For 2023: Highlights

In 2023, Focus Will Be On Smaller Elections
"It's quite an extraordinary coincidence that we don't have too many elections this year taking place, national elections, and so the focus may be on some of the smaller elections like Turkey, Nigeria. But generally it's quite extraordinary where you have a year with no big election around the world," says Ruchir Sharma.

India Needs To Seize Outsourcing Opportunities
Ruchir Sharma: People are still looking to outsource to countries such as America because the wages there are so much higher, but they don't want to do it to China anymore due to geopolitical reasons, and wages in China have gone up significantly, so therefore the outsourcing shifts to places in Asia including India, but we need to seize that opportunity.

2023 May Be The 1st Time That Economists Called A Recession
Ruchir Sharma: In the history of surveys, economists have never forecast a recession. So if a recession does happen in 2023, it will be the first time in the history of surveys that economists actually called a recession. But the broader point here is that generally, there is a lot of gloom around the world, and it's partly because of economics and partly because of politics because we've been through such a difficult period. There was the pandemic, and then there was the invasion of Ukraine, and then politics in many countries was not that favourable, with all sorts of surprise election results, and now black swans in general have become, rightly or wrongly, a symbol for what could go wrong.

Relief From Elections
"Among democracies, there isn't a single country that's having elections in 2023, and that hasn't happened this century, so it's quite a coincidence that it's happened," says Ruchir Sharma.

There Will Be Return To Orthodoxy: Ruchir Sharma
Prannoy Roy: Your next point is that there will be a return to orthodoxy, and what do you mean by that?

Ruchir Sharma: Because the era of easy money is over, interest rates have risen everywhere. Financing in general has become much more difficult. In this environment, the scope for policymakers to do something too experimental, something away from what is defined as economic orthodoxy, which is that you need to follow a tight fiscal policy, you need to have relatively high interest rates, if you try do so something different the markets going to come and punish you.

What Japan's Resurgence Means For India
"Japan's been a major investment partner of India. Having a healthier Japan with better corporate balance sheets could further that process," says Ruchir Sharma.

Less Money Meant Better TV?
"We saw a surge in the number of new streaming services, and we saw so much cheap money available to fund new projects and new series so global content spent on television surged over the last few years. But my point is that quality went down. That so many shows were commissioned which were possibly poorly conceived with the script or the concept was improperly done, but just in a hurry to get new subscribers," says Ruchir Sharma.

America Down, Rest Of The World Up
Ruchir Sharma: After this very extraordinary decade that America has had of great performance, I think that it is now set to underperform in the coming decade. Also because its size has become disproportionate, it will allow other countries, including emerging markets such as India, to do much better than America. That's my forecast, and I think in 2023 we are likely to see shades of that play itself out.

Global Economy Slowing, But Unemployment Rates Still At Record Low
"The global economy been slowing down and yet unemployment rates around the world are close to record lows.It is very hard to get people to come back into the labor force. A lot of people are still living off a lot of the stimulus that was put doing the pandemic," says Ruchir Sharma.

Why Is Everybody Worried About TikTok
When asked about why is everyone worried about TikTok, global investor Ruchir Sharma says, "I think it's pretty obvious. It's Chinese and so popular and I think that they have very sophisticated algorithm AI systems which I think a lot of people feel sort-of breaches the line."

Why Tech Boom Hasn't Improved Productivity
"I think a good reason for that could be the fact that you have too many inefficient zombie companies are which are kept alive. One statistic like in the US, the number of inefficient zombie companies, companies that are not able to even service their deals without borrowing more and more that, that number too shot up from nearly two percent in the 1980's to nearly twenty percent now," says Ruchir Sharma.

High Debt On Private Sector In Developed Economies
"Developed countries like the US have taken on so much debt on the private sector side in terms of the firms, that as interest rates have gone up, the cost of servicing the debt has been going up a lot," says Ruchir Sharma.

Demographic Changes Affecting Global Economy
The global economy which used to grow at let's say at 3.5-4% now is lucky to grow at 2.5-3% largely because of the demographic changes.