The global economy has managed to avoid a recession in recent months, thanks to resilient consumers, a surge in travel and leisure activities, and the reopening of China’s economy following pandemic-related lockdowns.
That’s likely to change in the second half of the year, says Capital Group economist Jared Franz, as the impact of high interest rates, inflation and a banking sector crisis combine to tip the world into a mild recession.
“Global economic growth is on track to decline by roughly 1% for the full year, in my view,” Franz explains. “That should be followed by fairly robust growth in 2024, driven by strong consumer spending and potentially lower interest rates in the U.S. and Europe.”
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You can read the rest of the Capital Group’s Outlook here.