Updated Outlook is Becoming Increasingly Pessimistic

Global economic growth is projected to decelerate in 2022. The Institute of International Finance (IIF, Washington) now expects global GDP to grow only by 2.3% this year after expanding by 5.8% in 2021. GDP growth in advanced economies is forecast at 2.1%, in emerging markets and developing economies – at 2.5% (in China – at 1.5%).

The outlook for growth in the Euro Area has been significantly revised down from 3% to 1%.

The outlook for the Russian economy is also more negative than for other economies: it is expected to decline by 15%. Ukraine's GDP is projected to shrink by 35%. This will have an impact on other countries in the region that will face a slowdown in economic growth.

The IIF expects China’s GDP to contract by 2.4% in Q2 compared to the same period last year. China’s GDP is projected to grow by 3.5% (down from its previous forecast of 5.1%) by the end of 2022.

Yesterday the Moody's Rating Agency updated its Macro Outlook. It now sees growth in advanced economies this year coming in at 2.6%, down from its previous forecast of 3.2%. The Agency also lowered its call for emerging markets and developing economies to 3.8% from 4.2%. The Agency does not currently expect a recession in any G20 country. However they believe that aggressive monetary tightening could become a catalyst for such a scenario.