EU: The world economy is likely to experience a decade of subpar growth, according to Daniel Lacalle, author and chief economist of EU: Tracy Gestion.
The invasion of Ukraine by Russia and China's resolute zero-Covid policies, which have pushed inflation through the roof and weakened activity, are just two of the shocks plaguing economies around the world.
According to current projections by the International Monetary Fund, global GDP growth will slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023. Except in the acute phase of the global financial crisis and the COVID-19 pandemic, the Fund has been described. This as "the weakest growth profile since 2001".
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Global inflation is forecast to rise from 4.7% in 2021 to 8.8% this year, before falling to 6.5% in 2023 and 4.1% by 2024, but will remain above the target levels of several major central banks during this period.
When China formally announced on Tuesday that quarantine requirements for incoming travelers would end on Jan. 8 -- marking the end of a zero-Covid policy that has been in place for nearly three years -- it sent shockwaves among economists and markets. Gave some goosebumps to the participants. consoled.
He said in an interview with CNBC's "Squawk Box Europe" on Tuesday that the full reopening of the Chinese economy was "the biggest positive" that the market can anticipate for 2023, according to Lacalle.
He said that the Chinese economy, which is vital to the expansion of the rest of the world, and especially Latin America and Africa, has been portrayed in a very bleak light.
“The reopening of the Chinese economy is certainly going to be an important boost to growth around the world, but also – and I think this is a very important factor – German exporters and French exporters being able to respond to the pinch A Chinese official said, "The lockdown and we have felt the weakening of the economy. The environment of profit in China, and that is definitely going to help a lot."
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However, he stressed that for some time to come, this increase will not even come close to bringing growth levels close to where they were in the years before the pandemic.
I believe we may be entering a decade of very, very poor growth, during which advanced economies will be privileged to experience 1% growth annually, if they are able to do so. More unfortunate than everything else, according to Lacalle, is that inflation will be high.
"I believe the significant stimulus program implemented in 2020 and 2021 is still having an impact today. Many economists had expected potential growth from this, but it hasn't materialized."
Despite the gloomy forecast, he insisted that no crisis was imminent.
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“I think markets are starting to price an environment in which the global situation is not one of buoyant levels of growth and economic growth, but [is] one that avoids financial crisis, and if it does, So it's definitely positive," he said in his conclusion.