People walk along a commercial street in Seoul on February 24, 2021.
Ed Jones | AFP | beautiful pictures
Economies in the Asia-Pacific will dominate global growth next year, according to S&P Global Market Intelligence.
S&P predicts the region will experience real growth of around 3.5% by 2023, while Europe and the US will likely face recession.
“Asia Pacific, which produces 35% of world GDP, will drive global growth in 2023, supported by regional free trade agreements, efficient supply chains and competitive costs. picture,” S&P said in a note.
The company cut its growth forecast for global real GDP by 0.6 percentage points from last month’s 2% forecast – and now expects 1.4% growth in 2023. That’s a sharp drop from global growth of 5.9% in 2021 and even slower than the 2.8% growth S&P expects in 2022.
With moderate growth in Asia-Pacific, the Middle East and Africa, the world economy could avoid a recession, but growth will be minimal
Sara Johnson
Managing Director, Economic Research, S&P Global Market Intelligence
While the negative outlook outside Asia-Pacific casts a shadow over the global economy as a whole, S&P forecasts the world will likely avoid a recession altogether.
“With moderate growth in Asia-Pacific, the Middle East and Africa, the world economy could be avoided,” said Sara Johnson, executive director of economic research, S&P Global Market Intelligence. recession, but growth will be minimal.
“Global economic conditions continue to deteriorate as inflation remains uncomfortably high and financial market conditions tighten,” she said, adding that Europe, the United States, Canada and regions of Latin America – is likely to see a recession in the coming months.
The company added that Southeast Asia and India would benefit from trade diversification “decoupling from mainland China”.
In times of market volatility, India has benefited from having a dominant economy and seeing relatively strong growth.
Data from CNBC’s Supply Chain Heatmap shows that China is losing much of its dominance in its manufacturing and export sectors, significantly driven by its zero-Covid policy.
With inflation expected to be contained and monetary policy to ease in the coming years, S&P said it expects global real GDP to grow to 2.8% in 2024 and 3.0% in 2020. 2025.
Recession in the US, Europe
Economies in Europe and North America, which account for more than half of the world’s output, are likely to face recessions in late 2022 and early 2023, S&P said.
“Especially high inflation is draining purchasing power and will lead to a reduction in consumer spending,” it said in the note. “Both Europe and North America will face the effects of reduced demand and tightening financial conditions on the housing and capital investment markets.
S&P said the expected slowdown in the US and Europe is also likely to have ripple effects around the world through trade and capital flows.
Fitch Ratings also expects the US economy to enter “real recession territory” in the second quarter of 2023, though said it will be relatively mild by historical standards.
“The recession is projected to be quite similar to 1990-1991, followed by a similarly rapid tightening by the Fed in 1989-1990. However, downside risk stems from non-financial debt ratios. as a share of GDP, much higher today than it was in the 1990s. Olu Sonola, head of regional economics for the US, said.
