Top 10 Predictions

2022 was a challenging year for investors, and we hope 2023 will be a better one. The research team at Consilium has embarked upon a new holiday tradition – sharing our “Top 10” predictions for 2023, and “Top 10” selection of books, movies, and TV that we enjoyed the most over the last year.

1.     The US will not enter a recession in 2023: While global growth may be moribund next year, growing between 1-2%, we anticipate that the US will lead developed market growth, and avoid a recession. By the end of the first quarter of 2023, the Fed will have raised nearly 500bps. We anticipate that the Fed will pause its hikes within the 1H of 2023. This will then allow for a recovery in the US housing market where inventory remains tight, reduce the strength of the US dollar as a headwind for US corporate margins, and help boost US consumer confidence. 

2.     Ukraine will “win” the war. With continued support from the US and Global allies, Ukraine’s highly motivated army will defeat Russia. Russia will never admit defeat or come to the negotiating table, but Ukraine will eventually push Russian troops across the remaining 50% of the territory Russia captured since the war’s beginning. Russia may try one last major offensive; however, we believe that once Ukraine counters, the Russian forces could make a large scale retreat. A lack of weapons, ammunition and parts will force Russia to rely on degraded old weaponry which will eventually prove untenable, and pariah-state allies (Belarus, Iran, North Korea) will not be able to bridge the gap. China is happy to take advantage of Russia economically, but will remain on the sidelines. The big question is can Ukraine recapture Crimea? We say no for 2023. With only a narrow isthmus for connection, a Crimean invasion would require significant air and amphibious operations which Ukraine would struggle to execute, and the US/Global allies will not want to actively commit to such an operation. 

3.     China will drive EM and the rest of the world. The world has awaited China opening for nearly three years since Covid. We believe that China re-opening will accelerate economic growth across global emerging and developed markets, with China likely to grow GDP north of 5%. While its re-opening may look like harrowing scenes we saw from India in 2020 as it struggles with a let it rip approach, we anticipate stock markets to rally ahead of any real economic growth as reflected in corporate earnings. While a policy back track is possible from the Chinese given Corvid deaths, we believe that this is less likely at this point as the horse has left the barn.

4.     Vietnam and Kazakhstan will be the winners in Frontier. Vietnam recorded GDP growth of 8% in 2022, and the government has set its target to 6.5% in 2023, which is more than achievable in our view. It will continue to be a net beneficiary of re-shoring away from China, with foreign investor friendly policies. In the first half of 2022 it attracted $14bn, with Samsung now the largest foreign investor in the country. Moreover, with the Vietnamese market down -32%   in USD for 2022, it is now trading at the bottom end of its range, giving it ample room to re-rate.
Kazakhstan suffered a double-whammy in 2022. First, in January the country saw widespread protests, ultimately resulting in the removal of the previous president’s cronies, and solidifying the rule of its current President Kassym-Jomart Tokayev. Secondly, the country was negatively impacted following the Russian invasion of Ukraine. As investors sought to reduce Russia exposure, they sold from where they could source liquidity, Kazakhstan was one of those markets, with its stock market down -27% in USD by the end of July. Since then, however, it has rallied, with the market up nearly +17% in USD. On an absolute basis, Kazakhstan remains quite cheap trading at a forward P/E multiple of 3.8x for EPS growth of 23.5% in 2023 (Bloomberg Consensus). The country is politically stable, has enacted democratic reforms, and is oil rich. We believe investors will look more favorably on the country next year, apart from its Soviet history.

5.     Oil prices to remain at/above $80/barrel. With burgeoning demand coming from an open China, Russia not going along with price caps, and OPEC+ safeguarding its own interests, we believe oil prices are likely to remain at, or above $80/barrel.

6.     Recovering air travel. Between 2019 and 2020 global airline passengers went from 4.5mn to 1.8mn. It’s taken nearly three years for global air passenger numbers to recover. We believe we are likely to see strong travel demand globally with global airline passengers to exceed 2019 levels for the first time.

7.     Global inflation to peak. Global supply chain snags, worker strikes, and stable oil prices, will lead to an environment with inflation in the rearview mirror for global markets. This should then be supportive for risk assets.

8.     Interest rates to also peak within the 1H of 2023. With inflation peaking, we anticipate rates to also peak within the first half of 2023. Specifically within the US, we believe while the Fed may not lower rates in the 2H of 2023, it will also not continue to raise rates.

9.     USD has Peaked. Given our above views on rates, and inflation, we believe that the USD, specifically the DXY, to give way to global and EM currencies. What has been a headwind for most emerging markets, will become a tailwind in 2023.

10.  The death of crypto? We have long not understood the mania around crypto. Given the fall of FTX, we believe much of the wind around crypto and bitcoin will fade as more individuals recognize “defi” and “crypto” are just by words for mania and Ponzi. At the end of the day, we believe in intrinsic value, and that assets should have some – digital or otherwise. Yet, we cannot predict what next investors may replace crypto for…perhaps tulips?


The below is a list of books, movie and TV shows from the past year that the research team at Consilium found enjoyable and thought provoking. (The below may have been published or released prior to 2022 but we discovered them in the past year and is in no particular ranking order).

1.     Book: Chip Wars by Chris Miller

2.     Book: Psychology of Money by Morgan Housel

3.     TV: Slow Horses on Apple TV

4.     Book: A Spy Among Friends by Ben Macintyre; TV: A Spy Among Friends

5.     Book: Putin’s People by Catherine Belton

6.     Book: The Power Law by Sebastian Mallaby

7.     Podcast: The Prince: Searching for Xi Jinping

8.     Movie: The Northman

9.     Movie: Top Gun: Maverick

10.  TV: Russia 1985-1999 TraumaZone

11.  Bonus: TV: Severance on HBO, TV: Jack Ryan on Amazon, TV: White Lotus Season 2 on HBO

What we look most forward to in 2023 is either the documentary or movie version of the rise and fall of FTX and its founder Sam Bankman-Fried