Barclays expects global growth to slow to 2.2% in 2023 from 2.8% this year, and warns that it expects advanced economies to shrink in the fourth quarter and hit zero next year. In 2021, global growth was 6.3%.
In the wake of the conflict between Russia and Ukraine, which has exacerbated supply chain problems, central banks around the world have rapidly tightened monetary policies to contain spiraling inflation as economies continue to recover from the pandemic.
According to Barclays, the slowdown in global growth will bring the world “close to a global recession”, adding that a lot of bad news is behind us.
“This is a bad economic outlook. But it could have been worse. There is a dividing line between gloom and doom, and that’s where we think the global economy is.”
Indicators are giving mixed signals about the strength of the US economy in light of the Fed’s tightening cycle, the broker said, adding that the US will “barely” avoid an outright recession next year.
Barclays expects a recession in Europe in the first half of 2023 and expects China to see a slight rebound in GDP growth in the fourth quarter, below its target of 5.5%, with the median also forecasting GDP growth for the country. by 80 basis points to 4.5% before 2023.
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