Not all parts of the world are experiencing the same economic environment, said Andy Baldwin, global managing partner-client service at EY. While China’s reversal of its zero-COVID policy may pose some short-term challenges, Manulife CEO Roy Gori expected activity to pick up in the second half of the year, providing impetus to Asia and the rest of the world. Many corporates we interviewed on GMF see Asia as the potential engine for the next leg of global growth. “Come summer or fall, China will be moving to the second phase of reform and opening up… that could certainly help the world also grow and ease the pain of a lot of industrial countries, including Europe,” Siemens Energy Chairman Joe Kaeser told GMF. Open for businessĬhina’s economic tsar Liu He made a big pitch for foreign investment at Davos on the first visit abroad by a high-level Chinese delegation since Beijing shelved its three-year-old zero-COVID policy. Still, risks were plentiful, including inflationary pressures from China’s reopening, rising debt distress in the developing world, and Western nations battling to bring inflation down to 2 percent. “That means we have the end of the strong dollar, the end of the perception that the rate differential can continue to spread and drive fund flows out of the emerging markets and into the dollar.” It’s not that all of the data radically changed, but it changed enough to hit the ‘recalc’ button on literally everything,” Collins told GMF.Ĭollins believes the Fed may hold rates at these elevated levels for longer. “There is a sense of a benign 2023 that did not exist when we went home for Christmas. “It’s a sense that peaked and… we’re not going to have a 5.5 percent terminal rate. “I think the paradigm has shifted radically we woke up on January 2,” said Jay Collins, vice chairman of banking, capital markets and advisory at Citi. They were now expecting the United States and Europe to experience only a mild recession this year, or even just a slowdown. at 0.5 percent, and for the euro area to stay flat.Īs the week progressed, many policymakers and senior company executives in attendance at the Swiss ski resort began to sound less gloomy. The World Bank forecasts growth for the U.S. That has its ripple effects,” Trotsenburg told GMF. “The three big growth bubbles are growing below expectations – the U.S., eurozone and China. “That makes it a very complicated operating environment.” Global Markets Forum: Refinitiv and Reuters bring together the most influential minds from finance and politics in topical debateĪxel van Trotsenburg, managing director of operations at the World Bank, was worried about the debt distress that many emerging economies were facing. WEF participants agreed the world was in a “polycrisis”, a trendy term to describe the threats posed by geopolitical tensions, macroeconomic gyrations with higher interest rates putting the brakes on economic growth and trade tensions fracturing supply chains, and climate change. Two-thirds of private and public sector chief economists surveyed by the WEF expected a global recession this year, while a survey of CEO attitudes by PwC was the gloomiest since the “Big Four” auditor launched the poll a decade ago.Ĭompanies that did well in 2022 are likely to see a more challenging year ahead, PwC Global Chairman Bob Moritz told the Reuters Global Markets Forum (GMF) at Davos. The World Economic Forum’s annual meeting at Davos this year began on a note of doom and gloom as the prospect of an imminent global recession featured high on the worry list of participants.
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