When making predictions on the global economy, analysts at Bank of America added more bright colors to the darker picture drawn by other economists. They believe that the situation is not as grim as previously estimated.
A team of analysts led by the head of Global Economics at Bank of America carefully studied the incoming data. It came to the conclusion that recession risks remain intact but they are not as high as they used to be. The global economy is steadily expanding. In this light, BofA upwardly revised its global GDP outlook for 2023. The global economy is expected to grow to 2.5% versus the December reading of 2.2%.
BofA analysts pointed out that the global economy remains resilient despite all the talks about a looming recession. They suppose that the eurozone will avoid a recession, while a downturn in the United States may occur later. In the next two years, the global economy is likely to expand at a slower pace. In 2024, its growth will be only 3%.
The bank improved its outlook amid stabilized supply chains and a relatively mild reaction of markets to aggressive rate hikes by central banks. Apart from that, the recovery of the services sector also slowed down inflation. Growing demand for commodities facilitated the Chinese economy. Only the eurozone is lagging behind other major economies. Despite the abnormally warm winter, it is still dealing with energy saving and subsidies, as well as soaring energy prices.
BofA assumes that the energy crisis in the EU will hardly end soon but it will not trigger an economic shock to the global economy. Nevertheless, analysts reckon that political, geopolitical, and other risks could batter the global economy. Yet, none of them are likely to pose a threat in the near future.
