ECONOMIC AND MARKET OVERVIEW
Economic growth around the globe is likely to be lower than was anticipated at the start of the year. Combined with the war in Ukraine, strict COVID 19 lockdowns in China, higher inflation for longer, and steeper than expected interest rate increases, it has had a significant negative impact on the expected earnings for companies which has been reflected in recent share price movements.
In a recent report, RMB Global Markets adds that the global growth outlook is vulnerable to both the impact of elevated commodity prices and increasingly restrictive monetary policies. Their base case is that output in advanced economies will slow, most notably in Europe, which is directly impacted by the war. Some resource-rich developing economies will continue to benefit from the higher commodity prices, but the net export position will be the differentiator.
