Global Macroeconomic Outlook 2023 | Morgan Stanley

With excessive post-COVID consumer demand, bloated retail inventories and the battle against inflation continuing to weigh on growth in 2023, Morgan Stanley believes global GDP growth will top out at just 2.2%, narrowly defying recession, but lower than the 3% growth expected for 2022.

The good news: 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.

Certainly, 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…

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