Total income reached to Dh5.607 billion compared to Dh4.431 billion, a solid expansion of 26.5 per cent YoY
Economists at CitiGroup said that they expect global growth to slow to below 2.0 per cent in 2023, sounding more pessimistic than the International Monetary Fund’s revised projection of 2.7 per cent growth.
Citi’s gloomy forecast made on Wednesday echoes similar projections by major financial institutions such as Goldman Sachs, Barclays, S&P Global Ratings, and J.P. Morgan.
“For 2023, Citi sees US GDP growth of 0.7 per cent and China GDP growth of 5.6 per cent. For 2023 Citi sees GDP contracting 0.4 per cent in the Euro area and 1.5 per cent in the UK.”
“The worst is yet to come, and for many people 2023 will feel like a recession,” the IMF analysts said.
Strategists at Citi Group cited continued challenges from the Covid-19 pandemic and the Russia-Ukraine war, which skyrocketed inflation to decades-high levels and triggered aggressive policy tightening, as reasons behind the outlook.
“We see global performance as likely (being) plagued by ‘rolling’ country-level recessions through the year ahead,” said Citi strategists, led by Nathan Sheets.
Emerging economies
Analysts at S&P Global Ratings also lowered their 2023 growth forecast for emerging economies, citing persistent pressures from the Russia-Ukraine conflict, a lingering Covid-19 pandemic and tight monetary policy conditions.
The ratings agency now projects real gross domestic product growth of 3.8 per cent next year, down from its previous forecast of a 4.1 per cent expansion.
Citi, the Wall-Street investment bank, expects year-on-year US inflation at 4.8 per cent next year, with the US Federal Reserve’s terminal rate seen between 5.25 per cent and 5.5 per cent.
Among other geographies, Citi sees the UK and euro area falling into recession by the end of this year, as both economies face the heat of energy constraints on supply and demand front, along with tighter monetary and fiscal policies.
For 2023, Citi projects the UK and euro area to contract 1.5 per cent and 0.4 per cent, respectively.
In China, the brokerage expects the government to soften its zero-Covid policy, which is seen driving a 5.6 per cent growth in gross domestic product next year.
Emerging markets, meanwhile, are seen growing 3.7 per cent, with India’s 5.7 per cent growth slower than this year’s 6.7 per cent prediction seen leading among major economies.
S&P Global analysts said their downward revision to global growth comes from all emerging markets excluding China and Saudi Arabia, with most economies poised to expand below their longer-run trend rates. They added that forecasts for 2024 and 2025 remain broadly unchanged, averaging at 4.3 per cent.
While inflation in emerging markets have passed the peak or are peaking soon on the back of declining food and fuel inflation, it is still poised to remain above central banks’ targets in many economies, forcing monetary policies to stay restrictive, the agency warned.
“But the deceleration in inflation--coupled with a worsening growth outlook--could bring policy easing onto the agenda in several EMs, especially in Latin America, by the middle of next year,” S&P said.
— issacjohn@khaleejtimes.com
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