In a poll conducted by Reuters, states that the global economy will grow by 2.1% in 2023; 2.8% in 2024 vs 2.3% and 3.0%, respectively, in an October poll.
The poll states that global economic growth is forecast to barely clear 2% this year, according to a Reuters poll of economists who said the greater risk was a further downgrade to their view, at odds with widespread optimism in markets since the start of the year.
''Falling energy prices, a slowdown in inflation in most economies from multi-decade highs, an unexpectedly resilient euro zone economy and China's economic reopening have led traders to speculate the downturn will be milder,'' Reuters reported.
''That has driven MSCI's all-country world index of shares .up nearly 20% from October lows, hitting a five-month closing high on Tuesday, despite the greater risk that central banks will keep interest rates higher for longer rather than cut them.''
''But economists as a whole were much less upbeat, paring back growth forecasts for this year and next from 2.3% and 3.0%, respectively, in an October 2022 poll to 2.1% and 2.8%, respectively.''
The report quoted analysts at Rabobank:
"The market continues to price for a dream scenario of inflation having peaked, then coming down sharply, but not overshooting to the downside.''
"However ... the range of scenarios ahead is truly broad, and yet the market seems to have settled for a happy median that seems the least likely to transpire."
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