Global GDP forecast to grow 2.9% in 2023: S&P Global

While the US had a strong first half of the year, leading S&P Global to raise its growth forecast by a full percentage point, growth is expected to dip below 1 per cent in the second half of the year. However, a recession is not anticipated.

On the other hand, the eurozone presents a contrasting narrative, currently in a state of stagflation, with strong employment and wages but low growth. However, the eurozone is expected to return to modest, positive growth in the second half of the year, with Spain and Italy as the standout performers. The UK's GDP is projected to remain flat this year, with a downgrade for 2024 due to higher-than-expected rates and tighter monetary conditions, as per the S&P Global Economic Outlook Q3 2023 report.

In emerging economies, India has overtaken China as the global growth leader. India's GDP expansion is expected to average about 6.5 per cent over the forecast period, compared to China's approximate 5 per cent. Nevertheless, due to China's larger economy size, it remains the most significant contributor to global growth, contributing around 1 percentage point per year.

Despite recent rate increases and an associated inversion of yield curves, which usually signals a sharp slowdown, demand remains resilient, particularly in the US and other advanced economies. Factors like generous fiscal spending and savings and wealth buffers have contributed to this resilience.

Fibre2Fashion News Desk (DP)