“2023 will be a tough year. Why? Because the three big economies, [the] US, EU, China, are all slowing down simultaneously. China, the world's second-largest economy, is likely to grow at or below global growth for the first time in 40 years as COVID-19 cases surge following the dismantling of its ultra-strict 'zero-COVID' policy. That has never happened before. And looking into next year, for three, four, five, six months the relaxation of COVID restrictions will mean bushfire COVID cases throughout China. I was in China last week, in a bubble in the city where there is 'zero COVID'. But that is not going to last once the Chinese people start travelling. Before COVID, China would deliver 34, 35, 40 percent of global growth. It is not doing it anymore. It is actually quite a stressful for … the Asian economies. When I talk to Asian leaders, all of them start with this question, 'What is going to happen with China? Is China going to return to a higher level of growth?' The US is most resilient. The US may avoid recession. We see the labour market remaining quite strong. This is, however, [a] mixed blessing because if the labour market is very strong, the Fed may have to keep interest rates tighter for longer to bring inflation down.”
01 Jan 2023
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