The Asia-Pacific region, which produces 35% of global GDP, is expected to dominate global economic growth in 2023, supported by regional free trade agreements, efficient supply chains and competitive costs, said S&P Global Market Intelligence .
“Southeast Asia and India will benefit from trade diversification away from mainland China,” he said in a note on Wednesday.
Meanwhile, he also expects the energy and mineral producing regions of the Middle East and Africa to see moderate growth as well.
On the United States, he said the continued tightening of financial conditions due to monetary policy tightening would tip the US economy into a “mild recession” starting in the fourth quarter of 2022 and continuing through the fourth quarter of 2022. second quarter of 2023.
This month, it revised down US real GDP growth in 2023 from 0.9 to (-) 0.5%.
“The initial recovery is slow, resulting in real GDP growth of just 1.3% in 2024. The recession will lead to reversals in employment and industrial production, which saw solid gains in the third quarter of 2022. We expect the US unemployment rate to rise from 3.5% in September to 6.0% by the end of 2023.”
On global inflation, he said that while meeting the central bank’s inflation targets will be a multi-year process, there is scope for “meaningful progress” in 2023.
Global consumer price inflation is expected to slow from 7.7% in 2022 to 5.1% in 2023 and 3.0% in 2024, provided inflation in advanced economies stabilizes at 2, 1%.
Global real GDP growth is expected to slow from 5.9% in 2021 to 2.8% this year and 1.4% in 2023, avoiding an “outright recession”, he said. Recessions now look likely in Europe and North America – economies that produce half of global output – in late 2022 and early 2023.
“Global economic conditions continue to deteriorate as inflation remains uncomfortably high and financial market conditions tighten. The coming months will likely bring recessions to Europe, the United States, Canada and parts of Latin America. With moderate growth in Asia Pacific, the Middle East, and Africa, the global economy may avoid a slowdown, but growth will be minimal,” said Sara Johnson, executive director, Economic Research, at S&P Global Market Intelligence.
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