Bungee economics
The 2023 economic outlook in China and the Asia Pacific region
Published by Mastercard Economics Institute, February 2023
Bungee jumping has close ties with the Asia Pacific region. It hails commercially from New Zealand in the 1980s, and the most storied location worldwide for a jump is in Macau off the coast of mainland China at a vertigo-inducing 233 meters.
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Now, after Covid-19 forced the world’s economies to collectively jump in 2020, what is the status of the Asia Pacific region in 2023?
After an initial rebound, a bungee jumper enters a disorienting bouncing phase when it is unclear if the trajectory is groundward or skyward. An analogy exists in the opposing economic forces that the world has been experiencing simultaneously: the release of pent-up savings and strong labor markets versus high inflation and rising interest rates.
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Western economies generally removed Covid restrictions earlier and have moved beyond the euphoria of reopening. They will likely see limited growth in 2023 after a relatively strong 2021 and 2022. Meanwhile, the slower reopening of eastern economies, particularly in northeast Asia and most notably mainland China, presents a different cycle that anticipates stronger growth in 2023.
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