Oliver Mangan: The global economy is not out of the woods just yet

China’s expected economic rebound this year has underwhelmed.

Surging inflation combined with a marked tightening of monetary policy, amid an environment of weakening confidence levels and heightened geo-political tensions, especially in relation to Ukraine, saw the world economy slow sharply during 2022. However, concerns that advanced economies could be facing a recession in 2023 have largely abated.

While survey data have been weak, especially on manufacturing, real economic data have generally printed ahead of expectations this year, most notably in the US, UK, and Japan. Lower commodity prices, declining headline inflation, and continuing strong labour markets have all supported economic activity, which was reflected in better-than-forecast GDP data in the last quarter for all the main developed economies. Indeed, 2023 GDP forecasts for the US, UK, and Japan have all been revised higher over the summer.