Investor sentiment is downbeat, but not overly bearish. With tightening credit conditions, our US growth outlook is lower compared to the IMF’s, while we are more optimistic on China. This supports a cautious stance and a search for opportunities across the emerging world, starting with China.
There are some signs of complacency on Europe, while debates were mostly focused on geo-economic fragmentation and the urgency of policy action regarding crisis management and to secure artificial intelligence development.
The global economy has proven resilient and remains on track despite the unfortunate sequence of crises that have occurred over the past four years. An intensification of the slowdown should materialise progressively this year and the next, despite the rebound expected in China following its economic reopening that at present has not spilt over to streaming partners. Inflation should prove stickier and stay above central bank targets for longer. Our base scenario is largely aligned with the ‘plausible’ scenario showcased by the IMF.
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