The Top 5 Economic Threats in 2023, According to Financial Pros

If you are prone to worry, 2023 is providing plenty of fuel for your fears.

Many economists are predicting a recession later this year. Inflation continues to provoke anxiety in households from coast to coast and around the globe. And woes ranging from product shortages to “shrinkflation” are bedeviling shoppers.

Recently, Natixis Investment Managers surveyed more than 400 investment professionals across 28 countries and asked them to name the biggest economic threats the world faces this year.

Following are their answers.

5. Global trade

Investment professionals who cite this as a top economic threat: 27%

Survey respondents are concerned that growth might slow as nations begin to reconsider global trade policies.

For example, financial pros note a trend toward more domestic production and “friend-shoring” — the notion of moving supply chains to countries with a lower risk of disruptions linked to political turmoil.

4. Consumer spending

Investment professionals who cite this as a top economic threat: 32%

Consumer spending drives the U.S. economy and fuels growth around the world. But rising prices may cause consumers to close their wallets, which could have dire economic consequences.

If rising prices have you worried, check out “10 Sure-Fire Ways to Beat Inflation.”

3. U.S./China relations

Investment professionals who cite this as a top economic threat: 48%

If ever two countries could be described as “frenemies,” those are the U.S. and China. The two nations’ fortunes are strongly tied to one another.

And yet, tensions are rising between the world’s two biggest economies, which puts the entire world on edge economically.

2. War

Investment professionals who cite this as a top economic threat: 49%

The war waged by Russia in Ukraine is entering its second year, and there is no end in sight.

The worst military conflict in Europe since World War II has rattled nations throughout the world, creating uncertainty that helps cloud the global economic outlook.

1. Central bank policy error

Investment professionals who cite this as a top economic threat: 52%

Last year, the Federal Reserve — the central bank of the U.S. — began a rate-hiking campaign intended to reduce inflation.

There is some evidence that those policies are working. But rate hikes come with a lot of uncertainty. Some worry they may provoke a recession.

That the central bank might miscalculate and cause chaos in the economy is the top fear of financial pros who participated in the survey.