The US will enter recession in the first half of 2023 after the UK and Europe and global equity markets could collapse, predicts Macquarie. It advises investors to be cautious towards equities as there could be headwinds due to weak corporate earnings.
Macquarie Asset Management in its latest report ‘Outlook 2023′ said that inflation is likely to ease during 2023 due to easing supply chain pressures and weak aggregate demand, but still above the central banks’ target of ~2% Will remain
The report estimates that even if the UK will be able to sustain the energy crisis that has emerged due to the Russia-Ukraine war this winter, by relying on imports of liquefied natural gas and diversifying its fuel sources, The real challenges will be in 2023. The year ahead will therefore witness a rapid transition to a low-carbon energy system.
The asset management firm also predicted that energy security will remain a major theme next year.
“The global economy recovered strongly from the COVID-19 pandemic, supported by the easing of movement restrictions as well as the release of pent-up demand in the form of a large amount of fiscal and monetary support. But it is now being hit by two major shocks: high inflation (which is pulling down real income) and rising interest rates,” the report said.
China’s economy is expected to boom in 2023
As the harsh COVID lockdown took a toll on the Chinese economy, Dragon is expected to miss its growth target of 5.5% this year for the first time since 2015.
Macquarie expects Chinese authorities to ease their monetary policy going forward. This could include a cut in the 5-year lending prime rate, a reduction in the reserve requirement ratio of banks, an increase in special bond quotas for local governments, and a reduction in the mortgage down-payment ratio.
Following the easing of harsh Covid restrictions and some monetary easing steps, Chinese growth could support the global economy which may be under pressure due to possible recessionary trends in early 2023.
short term recession
“While we believe the recession prospects are fairly high as our base case, we also expect the downturn to be relatively mild, not only by recent historical standards but also by longer-run standards. We also expect them to be relatively short-lived,” the report said.
Know your inner investor
Do you have guts of steel or are you a victim of insomnia regarding your investments? Let’s define your investment approach.
catch all business News, market news, today’s fresh news events and breaking news Update on Live Mint. download mint news app To get daily market updates.