December 30, 2022
According to Daniel Lacalle, author and head economist at Tressis Gestion, the world economy is expected to see a decade of subpar growth.
The invasion of Ukraine by Russia and China’s ongoing zero-Covid policies are just two of the many shocks that have crippled activity and driven inflation surging for economies all over the world.
According to current projections by the International Monetary Fund, global GDP growth would decrease from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023. With the exception of the global financial crisis and the severe period of the Covid-19 outbreak, the Fund described this as having the “weakest growth profile since 2001.”
Global inflation is anticipated to increase from 4.7% in 2021 to 8.8% this year before falling to 6.5% in 2023 and 4.1% by 2024, but it will continue to be higher than several major central banks’ goal levels throughout this entire period.
When China formally declared that quarantine requirements for foreigners entering the country would stop on January 8—signifying the end of the country’s almost three-year-old zero-Covid policy—it provided some consolation to economists and market investors.
The possibility of a full reopening of the Chinese economy, according to Lacalle, was “the biggest positive” that markets should anticipate for 2023. Lacalle was speaking to CNBC’s “Squawk Box Europe.”
“We have been looking at a very bleak picture for the Chinese economy, which is essential not just for the growth of the rest of the world but particularly for Latin America and also for Africa,” he said.
“The reopening of the Chinese economy is certainly going to give a significant boost to growth all over the world, but also — and I think it is a very important factor — German exporters, French exporters have felt the pinch of the lockdown and the weakening of the profit environment in China, and this is certainly going to help a lot.”
Source: CNBC
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