KUALA LUMPUR (Dec 24): The year 2022 will be remembered for central banks embarking on aggressive interest rate hikes as they attempt to douse inflationary fires set ablaze by the war in Ukraine, Covid-19-induced supply chain disruptions and surging demand as economies reopen.

Inflation in many countries reached levels not seen in decades. In the US, for example, inflation hit a 40-year high of 7.1% in June. In the UK, inflation accelerated to 11.1% in October.

The International Monetary Fund (IMF) expects global inflation to stay elevated at 6.5% in 2023, compared to 8.8% in 2022, before slowing further to 4.1% by 2024.

On the other hand, central banks’ monetary tightening policies have heightened the risk of recession as business activities slow. Some economists have forecast a recession in the eurozone while an economic slowdown is expected in the US.

Meanwhile, the IMF has forecast slower global growth of 2.7% in 2023 from 3.2% in 2022 and 6% in 2021 and warns that this is “the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the Covid-19 pandemic”.

Given the downside risk of slower growth ahead, will Malaysia be able to avoid a recession in 2023?

On the political front, it is a year of two firsts: we witnessed the first imprisonment of a former prime minister and Malaysia had its first hung parliament following the 15th general election.  

In the capital markets, as rates rise, high-growth stocks and risky assets that had benefited from ample liquidity, collapsed.    

The Edge Malaysia bumper issue looks at these watershed events and attempts to present what to expect in 2023 in The 8 things to watch in 2023.

This issue also features turkeys of the year, analysts’ best calls, the year's best property deals and best deals.

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Note that there will be no publication of The Edge Malaysia for the first week of 2023. We resume publication on Jan 9, 2023. 

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