ECONOMIC AND MARKET OVERVIEW
Global
The start of the year heralded an unpredicted slowdown in economic growth, lingering inflation and many guesses regarding the pace of interest rate increases around the world.
According to the International Monetary Fund’s latest World Economic Outlook, the global economy entered 2022 in a weaker position than initially expected As the new Omicron COVID 19 variant spreads, countries have reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad based inflation than anticipated, notably in the United States and many emerging market and developing economies. The ongoing retrenchment of China’s real estate sector and slower than expected recovery of private consumption also have limited growth prospects.
Global growth is expected to moderate from 5.9% in 2021 to 4.4% in 2022 – half a percentage point lower for 2022 than the October estimates. This largely reflects forecast markdowns in the two largest economies. A revised assumption removing the “Build Back Better” fiscal policy package from the baseline, earlier withdrawal of monetary accommodation, and continued supply shortages produced a downward 1.2 percentage points revision for the United States. In China, pandemic induced disruptions related to the zero tolerance COVID 19 policy and protracted financial stress among property developers have induced a 0.8 percentage point downgrade. Global growth is expected to slow to 3.8 percent in 2023. The forecast is conditional on adverse health outcomes declining to low levels in most countries by end 2022, assuming vaccination rates improve worldwide and therapies become more effective
