Feb 10 (Reuters) – The rapid reopening of China’s economy, plunging European gas prices and cooling U.S. inflation suggest a global recession may not be as deep and protracted as feared just weeks ago.
Yes, warning signals are still flashing as last year’s surge in inflation and interest rates bites, but a strong rally in world markets suggest optimism is returning.
The International Monetary Fund raised its 2023 global growth outlook and a painful euro area recession that was once seen as all-but-certain is less of a concern. Citi sees a 30% chance of a global recession this year, down from 50% in the second half of last year.
Feb 10 (Reuters) – The rapid reopening of China’s economy, plunging European gas prices and cooling U.S. inflation suggest a global recession may not be as deep and protracted as feared just weeks ago.
Yes, warning signals are still flashing as last year’s surge in inflation and interest rates bites, but a strong rally in world markets suggest optimism is returning.
The International Monetary Fund raised its 2023 global growth outlook and a painful euro area recession that was once seen as all-but-certain is less of a concern. Citi sees a 30% chance of a global recession this year, down from 50% in the second half of last year.
That’s propelled by the so-called Goldilocks view that the global economy will cool just enough to quell inflation, but not so much that earnings will collapse.
Corporate earnings are expected to improve from last year’s low base as inflation recedes.
Excluding volatile energy companies, MSCI world-listed companies’ earnings per share growth is expected to rise to 4.2% this year, from 1.8% expected for 2022, according to Barclays, then to 9.3% in 2024.
Source: www.reuters.com
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