Wine & Spirits Investment Report September 2023

Dear Investor,

We are offering a monthly wine investors plan, whereby you can invest a token amount each month to invest in wine. Complete this enquiry form for more info: https://docs.google.com/forms/d/e/1FAIpQLSdpo4nNFSSFjxMFZlK4-Nli_LOfOn2tKb9zo1-dOhYRt2XMIg/viewform

Executive Summary:
As of our last update in August 2023, the global economy was showing signs of recovery from the profound impacts of the COVID-19 pandemic. While certain regions and sectors are still facing challenges, on a macro scale, the world is not in a technical global recession. However, the pace and nature of recovery varies significantly across countries and industries.

1. Definitions:
A recession is typically defined as a significant decline in economic activity across the economy, lasting longer than a few months. It’s visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

2. Key Indicators:
Real Global GDP is forecasted to grow by 2.7 percent in 2023, down from 3.3 percent in 2022. We expect further slowing to 2.4 percent in 2024. Economic growth is moderating under the weight of still high inflation and monetary policy tightening.

Employment:
Global unemployment is slated to rise slightly in 2023, by around 3 million, to 208 million (corresponding to a global unemployment rate of 5.8 per cent). The moderate size of this projected increase is largely due to tight labour supply in high-income countries.

3. Regional Analysis:
North America: GDP rose 2.4% in Q2 in quarter-on-quarter annualized terms, up from Q1’s 2.0% expansion and outpacing market expectations. A rebound in fixed investment underpinned the reading, partly thanks to the government’s fiscal incentives spurring factory investment.

Europe: Compared with the same quarter of the previous year, seasonally adjusted GDP increased by 0.6% in the euro area and by 0.5% in the EU in the second quarter of 2023, after +1.1% in both zones in the previous quarter.

Asia: The average GDP growth rate for Emerging Asian countries is expected to increase to 5.3% in 2023 and 5.4% in 2024. ASEAN’s average real GDP growth is forecast to reach 4.6% in 2023 and 4.8% in 2024, weaker than in 2022, but showing resilience, based on the projection framework of the OECD Development Centre

Middle East, Africa: Real GDP growth in the Middle East and Central Asia is forecast to fall to 2.9% in 2023, from 5.3% last year, before improving to 3.5% in 2024, the IMF said in its Regional Economic Outlook report.

4. Sectoral Analysis:
Technology: The tech sector thrives due to increased demand for digital services and e-commerce.

Travel & Hospitality: One of the hardest-hit sectors, Global tourism arrivals will increase by 30% in 2023, following growth of 60% in 2022, but will remain below pre-pandemic levels.

5. Risks & Challenges:
While recovery was underway, several challenges persisted:
New COVID-19 variants: The emergence of new variants could lead to fresh lockdowns.
Inflation: Some economies faced rising inflation rates due to supply chain issues and increased government spending.

Geopolitical tensions: Trade wars and regional conflicts could hamper global growth.

Conclusion:
As of September 2023, the world’s economy is not in a technical recession. There are some indicators of recovery in many areas, but the future trajectory remains uncertain due to various challenges. Investors are advised to diversify portfolios, stay updated on global trends, and remain prepared for potential short-term volatility. 

Kind regards,
James Pala
Europe’s No 1 Wine Investment Analyst