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Mapped: Unemployment Forecasts, by Country in 2023



Unemployment Forecasts for 2023

Mapped: Unemployment Forecasts, by Country in 2023

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As 2022 clearly illustrated, the global job market can surprise expectations.

So far, this year is no different. The unemployment rate in six of the G7 countries hovers near the lowest in a century. With an unemployment rate of 3.4%, the U.S. jobless rate hasn’t fallen this low since 1969.

But as some economies navigate a strong labor market against high inflation and hawkish monetary policy, others are facing more challenging conditions. In the above graphic, we map unemployment forecasts in 2023 using data from the IMF’s World Economic Outlook.

Uncertainty Clouds the Surface

Across many countries, the pandemic has made entrenched labor trends worse. It has also altered job market conditions.

South Africa is projected to see the highest jobless rate globally. As the most industrialized nation on the continent, unemployment is estimated to hit 35.6% in 2023. Together, slow economic growth and stringent labor laws have prevented firms from hiring workers. Over the last two decades, unemployment has hovered around 20%.

Country / Region2023 Unemployment Rate(Projected)
🇿🇦 South Africa35.6%
🇸🇩 Sudan30.6%
🇵🇸 West Bank and Gaza25.0%
🇬🇪 Georgia19.5%
🇧🇦 Bosnia and Herzegovina17.2%
🇦🇲 Armenia15.1%
🇲🇰 North Macedonia15.0%
🇨🇷 Costa Rica13.2%
🇧🇸 The Bahamas12.7%
🇪🇸 Spain12.3%
🇬🇷 Greece12.2%
🇨🇴 Colombia11.1%
🇲🇦 Morocco10.7%
🇸🇷 Suriname10.6%
🇹🇷 Turkiye10.5%
🇧🇧 Barbados10.0%
🇦🇱 Albania10.0%
🇵🇦 Panama10.0%
🇷🇸 Serbia9.7%
🇮🇷 Iran9.6%
🇺🇿 Uzbekistan9.5%
🇧🇷 Brazil9.5%
🇮🇹 Italy9.4%
🇰🇬 Kyrgyz Republic9.0%
🇨🇻 Cabo Verde8.5%
🇨🇱 Chile8.3%
🇧🇿 Belize8.0%
🇵🇷 Puerto Rico7.9%
🇺🇾 Uruguay7.9%
🇦🇼 Aruba7.7%
🇫🇷 France7.6%
🇵🇪 Peru7.5%
🇸🇻 El Salvador7.5%
🇸🇪 Sweden7.4%
🇫🇮 Finland7.4%
🇲🇺 Mauritius7.4%
🇪🇬 Egypt7.3%
🇱🇻 Latvia7.2%
🇳🇮 Nicaragua7.2%
🇱🇹 Lithuania7.0%
🇦🇷 Argentina6.9%
🇪🇪 Estonia6.8%
🇧🇳 Brunei Darussalam6.8%
🇲🇳 Mongolia6.6%
🇭🇷 Croatia6.6%
🇨🇾 Cyprus6.5%
🇵🇹 Portugal6.5%
🇵🇰 Pakistan6.4%
🇵🇾 Paraguay6.4%
🇸🇰 Slovak Republic6.2%
🇩🇴 Dominican Republic6.2%
🇨🇦 Canada5.9%
🇦🇿 Azerbaijan5.8%
🇸🇲 San Marino5.7%
🇧🇪 Belgium5.6%
🇷🇴 Romania5.5%
🇫🇯 Fiji5.5%
🇵🇭 Philippines5.4%
🇮🇩 Indonesia5.3%
🇩🇰 Denmark5.3%
🇱🇰 Sri Lanka5.0%
🇱🇺 Luxembourg5.0%
🇮🇪 Ireland4.8%
🇰🇿 Kazakhstan4.8%
🇬🇧 United Kingdom4.8%
🇧🇬 Bulgaria4.7%
🇦🇹 Austria4.6%
🇭🇳 Honduras4.6%
🇺🇸 U.S.4.6%
🇧🇭 Bahrain4.4%
🇷🇺 Russia4.3%
🇧🇾 Belarus4.3%
🇸🇮 Slovenia4.3%
🇲🇾 Malaysia4.3%
🇨🇳 China4.1%
🇮🇸 Iceland4.0%
🇧🇴 Bolivia4.0%
🇭🇰 Hong Kong SAR4.0%
🇳🇱 Netherlands3.9%
🇳🇿 New Zealand3.9%
🇭🇺 Hungary3.8%
🇳🇴 Norway3.8%
🇮🇱 Israel3.8%
🇪🇨 Ecuador3.8%
🇦🇺 Australia3.7%
🇲🇽 Mexico3.7%
🇹🇼 Taiwan 3.6%
🇲🇩 Moldova3.5%
🇰🇷 South Korea3.4%
🇩🇪 Germany3.4%
🇲🇹 Malta3.3%
🇵🇱 Poland3.2%
🇸🇨 Seychelles
🇲🇴 Macao SAR2.7%
🇯🇵 Japan2.4%
🇨🇭 Switzerland2.4%
🇻🇳 Vietnam2.3%
🇨🇿 Czech Republic2.3%
🇸🇬 Singapore2.1%
🇹🇭 Thailand 1.0%

In Europe, Bosnia and Herzegovina is estimated to see the highest unemployment rate, at over 17%. It is followed by North Macedonia (15.0%) and Spain (12.7%). These jobless rates are more than double the projections for advanced economies in Europe.

The U.S. is forecast to see an unemployment rate of 4.6%, or 1.2% higher than current levels.

This suggests that today’s labor market strength will ease as U.S. economic indicators weaken. One marker is the Conference Board’s Leading Economic Index, which fell for its tenth straight month in December. Lower manufacturing orders, declining consumer expectations, and shorter work weeks are among the indicators it tracks.

Like the U.S., many advanced countries are witnessing labor market strength, especially in the United Kingdom, Asia, and Europe, although how long it will last is unknown.

A Closer Look at U.S. Numbers

Unlike some declining economic indicators mentioned above, the job market is one of the strongest areas of the global economy. Even as the tech sector reports mass layoffs, unemployment claims in the U.S. fall below recent averages. (It’s worth noting the tech sector makes up just 4% of the workforce).

In 2022, 4.8 million jobs were added, more than double the average seen between 2015-2019. Of course, the pandemic recovery has impacted these figures.

Some analysts suggest that despite a bleaker economic outlook, companies are hesitant to conduct layoffs. At the same time, the labor market is absorbing workers who have lost employment.

Consider the manufacturing sector. Even as the January ISM Purchasing Managers Index posted lower readings, hitting 47.4—a level of 48.7 and below generally indicates a recession—factories are not laying off many workers. Instead, manufacturers are saying they are confident conditions will improve in the second half of the year.

Containing Aftershocks

Today, strong labor markets pose a key challenge for central bankers globally.

This is because the robust job market is contributing to high inflation numbers. Yet despite recent rate increases, the impact has yet to prompt major waves in unemployment. Typically, monetary policy moves like these takes about a year to take peak effect. To combat inflation, monetary policy has been shown to take over three or even four years.

The good news is that inflation can potentially be tamed by other means. Fixing supply-side dynamics, such as preventing supply shortages and improving transportation systems and infrastructure could cool inflation.

As investors closely watch economic data, rising unemployment could come on the heels of higher interest rates, but so far this has yet to unravel.

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How Disinflation Could Affect Company Financing

History signals that after a period of slowing inflation—also known as disinflation—debt and equity issuance expands.



Chart showing U.S. Equity Issuance Deal Value from 1980-2000. Equity Issuance goes up over time, with the 300% increase in 1983 highlighted at the end of the disinflation period.
The following content is sponsored by Citizens Commercial Banking

How Disinflation Could Affect Company Financing

The macroeconomic environment is shifting. Since the second half of 2022, the pace of U.S. inflation has been dropping.

We explore how this disinflation may affect company financing in Part 2 of our Understanding Market Trends series from Citizens.

Disinflation vs. Deflation

The last time inflation climbed above 9% and then dropped was in the early 1980’s.

Time PeriodMarch 1980-July 1983June 2022-April 2023*
Inflation at Start of Cycle14.8%9.1%
Inflation at End of Cycle2.5%4.9%

* The June 2022-April 2023 cycle is ongoing. Source: Federal Reserve. Inflation is based on the Consumer Price Index.

A decrease in the rate of inflation is known as disinflation. It differs from deflation, which is a negative inflation rate like the U.S. experienced at the end of the Global Financial Crisis in 2009.

How might slowing inflation affect the amount of debt and equity available to companies?

Looking to History

There are many factors that influence capital markets, such as technological advances, monetary policy, and regulatory changes.

With this caveat in mind, history signals that both debt and equity issuance expand after a period of disinflation.

Equity Issuance

Companies issued low levels of stock during the ‘80s disinflation period, but issuance later rose nearly 300% in 1983.

YearDeal Value

Source: Bloomberg. U.S. public equity issuance dollar volume that includes both initial and follow-on offerings and excludes convertibles.

Issuance grew quickly in the years that followed. Other factors also influenced issuance, such as the macroeconomic expansion, productivity growth, and the dotcom boom of the ‘90s.

Debt Issuance

Similarly, companies issued low debt during the ‘80s disinflation, but levels began to increase substantially in later years.

YearDeal Value Interest Rate

Source: Dealogic, Federal Reserve. Data reflects U.S. debt issuance dollar volume across several deal types including: Asset Backed Securities, U.S. Agency, Non-U.S. Agency, High Yield, Investment Grade, Government Backed, Mortgage Backed, Medium Term Notes, Covered Bonds, Preferreds, and Supranational. Interest Rate is the 10 Year Treasury Yield.

As interest rates dropped and debt capital markets matured, issuing debt became cheaper and corporations seized this opportunity.

It’s worth noting that debt issuance was also impacted by other factors, like the maturity of the high-yield debt market and growth in non-bank lenders such as hedge funds and pension funds.

Then vs. Now

Could the U.S. see levels of capital financing similar to what happened during the ‘80s disinflation? There are many economic differences between then and now.

Consider how various indicators differed 10 months into each disinflationary period.

January 1981April 2023*
Inflation Rate
Inflation Expectations
Next 12 Months
Interest Rate
10-Yr Treasury Yield
Unemployment Rate
Seasonally Adjusted
Nominal Wage Growth
Annual, Seasonally Adjusted
After-Tax Corporate Profits
As Share of Gross Value Added

* Data for inflation expectations and interest rate is as of May 2023, data for corporate profits is as of Q4 1980 and Q1 2023. Inflation is a year-over-year inflation rate based on the Consumer Price Index. Source: Federal Reserve.

The U.S. economy is in a better position when it comes to factors like inflation, unemployment, and corporate profits. On the other hand, fears of an upcoming recession and turmoil in the banking sector have led to volatility.

What to Consider During Disinflation

Amid uncertainty in financial markets, lenders and investors may be more cautious. Companies will need to be strategic about how they approach capital financing.

  • High-quality, profitable companies could be well positioned for IPOs as investors are placing more focus on cash flow.
  • High-growth companies could face fewer options as lenders become more selective and could consider alternative forms of equity and private debt.
  • Companies with lower credit ratings could find debt more expensive as lenders charge higher rates to account for market volatility.

In uncertain times, it’s critical for businesses to work with the right advisor to find—and take advantage of—financing opportunities.

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