MADRID, 26 Dic. (EUROPA PRESS) –
The asset manager Schroders moves away from the market consensus and anticipates a fall in US GDP of 1% in 2023, compared to the expected growth of 0.2%, while it expects a rise in the global economy of 1.3%, thanks to “strong growth” in emerging markets and especially China.
This has been explained by the firm’s chief economist, Keith Wade, in an outlook report for 2023, in which he has indicated that this drop in US GDP will translate into a 14% drop in corporate profits.
According to the document, inflation will remain in the spotlight, while businesses, consumers and markets in developed economies seem to have adjusted to the idea that a recession is coming.
“Although the current outlook may seem very bleak, acceptance of the challenges ahead helps create the best possible conditions for taking action to ease inflationary pressures. These pressures will not subside immediately, but by the end of 2023 we could be in a position to beginning to glimpse a drop in interest rates,” Wade stressed.
The firm expects US rates to peak in the target range of 4.5% and 4.75% in the first quarter of next year.
The chief economist at Schroders has pointed out that the drop in interest rates “would be the counterpart to containing inflation and restoring price stability, so important for companies to plan and invest sensibly.”
Lower rates would also provide consumers with “some relief” in the face of a cost-of-living crisis of historic proportions.
For investors, this could allow for a recovery in valuations, although all bets could be off if the geopolitical fissures opened up after Russia’s invasion of Ukraine deepen or US-China relations deteriorate again. Furthermore, deteriorating geopolitics could lead the world in a more stagflationary direction than anticipated.
