We have reviewed the content and probabilities of our scenarios. First of all, we have included in our central scenario some of the risks that are materialising (e.g. stagflation in Europe) and that were previously included in our downside scenario.
Against this backdrop, the probability of this scenario increases (from 60 to 70%). The downside scenario is also becoming much darker (global recession /debt crisis). And it is now counterbalanced by a new upside scenario, that of a rapid decline in inflation due to an easing of gas prices.
We keep the same probabilities for the three families of risks. We see risks growing on all fronts, closely linked to each other. Economic fundamentals are deteriorating globally (which is reflected in the central scenario). The course of the war in Ukraine and its potential implications can tip the scenario in either direction. We consider Covid-related risks (including lockdowns in China) as part of the economic risks.
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