Recent forecasts of global economic activity by the World Bank, the International Monetary Fund (IMF), and the OECD all highlight the fact that the health of the global economy is very fragile. For example, in its latest (July 23) World Economic Outlook,
Recent forecasts of global economic activity by the World Bank, the International Monetary Fund , and the OECD all highlight the fact that the health of the global economy is very fragile. For example, in its latest , the IMF stated that “the balance of risks to global growth remains tilted to the downside”.report projects that the global economy will slow substantially this year to +2.1% and make a “tepid” recovery amounting to +2.4% in 2024.
Over the past few weeks, the consensus outlook for the U.S. has brightened. Following comments by U.S. Federal Reserve Chairman Jerome Powell that the Fed was no longer forecasting a recession, theHowever, some forward-looking indicators have yet to reflect a more upbeat outlook. These include the Chicago National Activity Index, which has trended lower over the past two months.
Finally, the more sanguine view of the U.S. economy’s near-term outlook which some have adopted is not shared by all. Especially noteworthy,, who correctly anticipated the 2007 recession, is still calling for a recession in the U.S. starting late this year or early in 2024. He bases this outlook, in part, on the recent performance of the U.S. Leading Economic Index which has fallen by -1.3% over the past two months and is down by -4.2% since the beginning of the year.
Finally, given the Bank of Canada’s expectation that inflation will remain above its +2% target for an extended period, we expect that it will keep rates at their current high level longer than they have in the past. Persisting high-interest rates and a record-high ratio of consumer debt to disposable incomes will weigh on the two interest-sensitive components of demand, notably housing and consumer spending.
France Dernières Nouvelles, France Actualités
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