Inflation has peaked and fallen, driven by energy prices, while growth has seen surprises in China and the Eurozone.
Central banks and governments have conflicting policies, with central banks focusing on slowing down demand and governments adding to demand.
Deep dives
Assessing the Global Economy
The podcast episode discusses the current state of the global economy, which has been dominated by high inflation and rising interest rates. It examines whether the tightening cycles are close to completion and explores the outlook for growth, highlighting both upside and downside risks.
Inflation and Growth Surprises
The episode highlights that while inflation has peaked and gradually fallen, it has been largely driven by energy prices and base effects. On the other hand, growth has seen some surprises, with China's reopening stalling and the Eurozone experiencing a mild recession. However, global GDP forecasts remain unchanged, with upward revisions in Latin America and India offsetting the lowered projections for China and the Eurozone.
Central Banks and Governments at Odds
The podcast delves into the relationship between central banks and governments, noting how their policies may be working against each other. While central banks focus on slowing down demand to tackle high inflation, governments are implementing policies that add to demand. The report also highlights some upside risks, such as lower input costs and continued good news in certain sectors, as well as downside risks related to tightening monetary conditions and potential financial stability risks.
Janet Henry assesses whether tightening cycles are nearly complete, the prospects for growth, and some of the upside and downside risks that might lie ahead for the world economy. Disclaimer: Stay connected and access free to view reports and videos from HSBC Global Research follow us on LinkedIn https://www.linkedin.com/feed/hashtag/hsbcresearch/ or click here: https://www.gbm.hsbc.com/insights/global-research.
