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B. G., Opalesque Geneva: According to Morgan Stanley's 2023 Global Macro Outlook, we should see weaker growth, less inflation and the end of rate hikes, with the U.S. narrowly missing a recession, Europe contracting and Asia offering green shoots for growth. The private bank further believes global GDP growth may reach 2.2%, narrowly defying recession but lower than the 3% growth expected for 2022.
Global inflation is set to peak in the fourth quarter of 2022. In fact, slowing demand, price discounts due to elevated inventories and declining housing prices, among other factors, will help temper inflation, which should, in turn, prompt major central banks to pause and assess their recent historic string of rate rises. The interplay of inflation and central bank intervention will ultimately shape the story of economic growth for 2023.
"The last 12 months have seen the fastest increase in the Federal funds rate since 1981 and the fastest increase in European Central Bank (ECB) rates since the establishment of the Eurozone," says Seth B. Carpenter, Morgan Stanley's Chief Global Economist. "But as consumer goods' supply chains recover and labour markets see less friction, we could see a sharper and broader fall in inflation, which would imply a somewhat easier path for poli...................... To view our full article Click here
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