Energy Crisis and Inflation Dampen Growth Prospects
Nordic corporate bank SEB has released its latest Nordic Outlook report this morning. The report contains SEB economists' views on Swedish and worldwide economic developments, including the policy dilemmas brought on by the energy crisis and accelerating inflation, the impact of China’s strict COVID-19 policy on long-term growth, key forecasts and analysis of other major trends affecting the world economy.
It also includes an in-depth article on the economic effects of the war in Ukraine, and examines quantitative tightening in monetary policy, mild recession expectations, and Sweden’s upcoming election.
Please see the top line points below. A link to the full report can be found here; the following represents the contents of the associated press release, ad verbatim.
Jens Magnusson, chief economist at SEB, says: “In Europe, the energy crisis is assuming more and more dramatic forms, and no end to the Ukraine war is in sight. A consumption-driven downturn is thus inevitable this autumn. In the United States, GDP growth will continue to slow this autumn as Federal Reserve rate hikes increasingly restrain the economy.”
US: A mild recession soon, due to inflation and Fed actions
GDP growth to slow to 1.5% this year and reach only 0.5% in 2023, as home construction, business investment, and consumption slow
Fed key rate will peak at 3.25-3.50% after a 50 bp hike in September followed by two 25 bp hikes in November and December
The jobless rate to climb from 3.5% in July to 5% by the end of 2023, amid ageing labour force and barriers to immigrations inhibiting potential for increased labour supply
UK: Higher inflation risk due to structural GDP headwinds
GDP to increase by 3.5% in 2022, before falling by -0.3% in 2023
Full-year CPI inflation to be 9.9% in 2022, and expected to reach 11.8% in 2023
BoE will raise its key rate to 2.75% at the end of 2022 and keep it at that level during 2023
China: Growth takes backseat to COVID policy
GDP to grow by 3.5% in 2022, and by 5.3% in 2023
Inflation to rise to 2.4% in 2022, before levelling out at 2.3% in 2023
Beijing likely to increase public investments in an effort to stabilise the labour market
Euro area: From chill wind to storm
GDP to fall in late 2022, with full-year 2023 growth only at 0.3%
Core inflation to peak at relatively moderate levels of around 4.5% in September and October and then fall slowly, mainly due to base effects
ECB to speed up rate hikes with three 50 bp and one 25 bp increases, with the ECB’s refi rate reaching 2.25% in February 2023
Sweden: Inflation and falling home prices squeeze households
GDP to grow slower in late 2022 by 2.6% for the year, with no growth expected in 2023
Home prices will probably fall by 15-20%
Frontloaded Riksbank hikes will bring the key rate to 2.25% in April 2023 but rate cuts will begin in 2024
Global: Mild recession amid energy and interest rate worries
Global GDP growth to increase by 3.1% in 2022 and slow to 2.6% in 2023 as worsening energy crisis, including soaring natural gas prices, and inflation are squeezing households and businesses
Due to resilient labour markets and the easing of global supply chain disruptions, we likely face a relatively mild recession
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Energy Crisis and Inflation Dampen Growth Prospects
Nordic corporate bank SEB has released its latest Nordic Outlook report this morning. The report contains SEB economists' views on Swedish and worldwide economic developments, including the policy dilemmas brought on by the energy crisis and accelerating inflation, the impact of China’s strict COVID-19 policy on long-term growth, key forecasts and analysis of other major trends affecting the world economy.
It also includes an in-depth article on the economic effects of the war in Ukraine, and examines quantitative tightening in monetary policy, mild recession expectations, and Sweden’s upcoming election.
Please see the top line points below. A link to the full report can be found here; the following represents the contents of the associated press release, ad verbatim.
Energy Crisis and Inflation Dampen Growth Prospects
Nordic corporate bank SEB has released its latest Nordic Outlook report this morning. The report contains SEB economists' views on Swedish and worldwide economic developments, including the policy dilemmas brought on by the energy crisis and accelerating inflation, the impact of China’s strict COVID-19 policy on long-term growth, key forecasts and analysis of other major trends affecting the world economy.
It also includes an in-depth article on the economic effects of the war in Ukraine, and examines quantitative tightening in monetary policy, mild recession expectations, and Sweden’s upcoming election.
Please see the top line points below. A link to the full report can be found here; the following represents the contents of the associated press release, ad verbatim.
Jens Magnusson, chief economist at SEB, says: “In Europe, the energy crisis is assuming more and more dramatic forms, and no end to the Ukraine war is in sight. A consumption-driven downturn is thus inevitable this autumn. In the United States, GDP growth will continue to slow this autumn as Federal Reserve rate hikes increasingly restrain the economy.”
US: A mild recession soon, due to inflation and Fed actions
GDP growth to slow to 1.5% this year and reach only 0.5% in 2023, as home construction, business investment, and consumption slow
Fed key rate will peak at 3.25-3.50% after a 50 bp hike in September followed by two 25 bp hikes in November and December
The jobless rate to climb from 3.5% in July to 5% by the end of 2023, amid ageing labour force and barriers to immigrations inhibiting potential for increased labour supply
UK: Higher inflation risk due to structural GDP headwinds
GDP to increase by 3.5% in 2022, before falling by -0.3% in 2023
Full-year CPI inflation to be 9.9% in 2022, and expected to reach 11.8% in 2023
BoE will raise its key rate to 2.75% at the end of 2022 and keep it at that level during 2023
China: Growth takes backseat to COVID policy
GDP to grow by 3.5% in 2022, and by 5.3% in 2023
Inflation to rise to 2.4% in 2022, before levelling out at 2.3% in 2023
Beijing likely to increase public investments in an effort to stabilise the labour market
Euro area: From chill wind to storm
GDP to fall in late 2022, with full-year 2023 growth only at 0.3%
Core inflation to peak at relatively moderate levels of around 4.5% in September and October and then fall slowly, mainly due to base effects
ECB to speed up rate hikes with three 50 bp and one 25 bp increases, with the ECB’s refi rate reaching 2.25% in February 2023
Sweden: Inflation and falling home prices squeeze households
GDP to grow slower in late 2022 by 2.6% for the year, with no growth expected in 2023
Home prices will probably fall by 15-20%
Frontloaded Riksbank hikes will bring the key rate to 2.25% in April 2023 but rate cuts will begin in 2024
Global: Mild recession amid energy and interest rate worries
Global GDP growth to increase by 3.1% in 2022 and slow to 2.6% in 2023 as worsening energy crisis, including soaring natural gas prices, and inflation are squeezing households and businesses
Due to resilient labour markets and the easing of global supply chain disruptions, we likely face a relatively mild recession
Posted at 12:33 PM in News & Comment | Permalink