Economic Outlook (May 2023)
I. GLOBAL ECONOMIC CONDITIONS
The global economy outperformed expectations at the beginning of the year, mainly reflecting strong service-driven performance in advanced economies and the reopening of China. However, the growth trend is expected to gradually slow due to persistent monetary policy tightening and recent banking sector turmoil in advanced economies.
▪ In the U.S., expectations for further interest rate hikes have weakened due to economic slowdown concerns and recent bank failures. China has been recovering after its reopening, but mainly in domestic demand and services, and thus spillover effects to neighboring countries have been limited.
▪ World economic growth in 2023 is expected to be 2.5%, slightly higher than the February forecast (2.4%), due to strong performance at the beginning of the year. However, in the second half this year the growth trend is expected to be more moderate than expected due to further credit tightening and the lagged effect of interest rate hikes.
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