Article29 Aug 2023

Desynchronization and the Global Economy

For the global economy, desynchronization is the word of the moment. Global economic performance has surprised on the upside this year. But that is no cause for mass celebration.

A recent Citi Research report, from a team led by global chief economist Nathan Sheets, offers a global growth forecast for this year and next, with the team’s outlook “soft” but still not a full-blown global recession. The authors note that risks to their forecast are skewed to the downside, but the features of those risks vary notably across major regions, each of which has a distinct and idiosyncratic narrative.

The desynchronized nature of global performance, they observe, is a striking feature of the current global outlook. The team notes that the global economy continues to face multiple headwinds—including high inflation, tight central bank policies, and ongoing geopolitical tensions—but growth has remained resilient.

All told, Citi Research analysts see global growth coming in at 2.4% this year, somewhat below the 3% estimate of trend, and falling below 2% next year as the US and UK potentially fall into recession early and growth in China slows further. They see the first half of next year as the low point for global growth, with the pace of expansion dipping to 1% before picking up in the second half. Excluding China, global growth early next year is seen falling to just slightly above zero.

Global Real GDP Growth Forecasts


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