Global economy to grow by 2.9% in 2023: S&P

The company revised its 2023 forecasts for many key advanced economies, including the United States (0.7 per cent to 1.7 per cent), the United Kingdom (minus 0.5 per cent to 0 per cent), Japan (1 per cent to 1.2 per cent) and the euro zone (0.3 per cent to 0.6 per cent).

On the other hand, the forecast on China was revised down to 5.2 per cent from 5.5 per cent, given the country's uneven recovery.

Though inflation has eased in several key advanced economies, it remains well above central bank targets, a release from the company noted.

While central banks worldwide have hiked interest rates at a fast pace, global economic activity continues to be resilient, resulting in interest rates likely to remain high, S&P Global said.

The US real GDP grew by an annualised 2 per cent in the first quarter this year, but slower than 2.6 per cent growth in the previous quarter. The upward revision in GDP growth was due to upward revisions in exports and consumer spending.

Inflation in the United States cooled to 3 per cent in June from 4 per cent in May, partially due to a high base effect. Core inflation, which excludes food and fuel, also cooled to 4.8 per cent in June from 5.3 per cent in May.

US trade deficit narrowed to $69 billion in May as imports fell at a faster pace than exports. Imports decreased by 0.8 per cent to $247.1 billion, while exports fell by 2.3 per cent to $316.1 billion. 

UK gross domestic product (GDP) contracted by 0.1 per cent month on month in May compared with 0.2 per cent growth in April. The fall was driven by a 0.6 per cent contraction in production output.

UK consumer price index-based inflation was at 7.9 per cent from 8.7 per cent due to a year-on-year fall in prices of fuel. Core inflation in the country cooled to 6.9 per cent in June from a 31-year high of 7.1 per cent in May.

The first quarter real GDP growth in the euro zone this year stood at minus 0.1 per cent for the second quarter in a row. The unemployment rate stood at 6.5 per cent in May, which was stable compared with the previous month.

CPI inflation is expected in the zone to ease to 5.5 per cent in June from 6.1 per cent in May led by the faster on-year fall in energy prices and softening food inflation.

ALCHEMPro News Desk (DS)