Dun & Bradstreet has released "Country Risk and Global Outlook Report" highlighting the sobering of economic expectations

Businesses are preparing to close the first quarter of 2023 with mixed feeling about the state of the global economy. The confusion is apparent when we look at the GDP and inflation data. GDP growth figures confirmed that the global economy held up well in 2022, but not as well as the markets had initially thought - Q4 2022 GDP estimates for both the US and Germany were revised downward. Data on inflation suggests that we are closer to the end of the current monetary tightening cycle, but, again, not as close as the markets had initially forecast (or hoped). Inflation in parts of the eurozone came in higher than expected and even higher than prior months, US headline inflation didn?t come down as much as expected, and core inflation around the world is still rising. Businesses are likely to face tight credit conditions and anemic growth for a prolonged period.

In the US, a combination of a historically tight labor market, a weak housing market and expectations of higher-for-longer rates mean that financial market positions are being reversed from just a few weeks ago. The yield on the 10-year Treasury note climbed up again, the dollar regained strength, and hawkish chatter is back on the rise. We retain our call of a 25bps hike in the US Fed?s March meeting, based on the rationale that in times of uncertainty, moving slowly can help the Fed avoid erring on the other side of over-tightening. Our call is contingent on no surprises in the inflation readings that will come in about a week prior to the Fed?s March meeting. Any digressions from the expected quarter point hike may be jarring though.

On the other hand, data coming out of Asia consolidated our view on the region. In Mainland China, following the reopening, manufacturing is gathering steam, travel around the Lunar New Year picked up and inflation remains in control. Mainland China has just announced a 5% GDP growth target for 2023. This target is lower than the one set for 2022 and is modest enough to be met in the absence of a major shock. Much of March will be spent analyzing the details of the ?Two Sessions? meetings to get an insight into the current thinking of policymakers of the world?s second-largest economy. China?s reopening will help other Asian economies as well, but weakness in the exports markets of the EU, the UK, and the US, a cyclical downturn in the semiconductor market, external imbalances of several low- and middle-income countries, and geopolitics all work as dampeners on the region?s prospects. We view this as a balanced dynamic, underpinning our stable outlook on the region, which is still an outlier to the deteriorating outlook globally.

GLOBAL OUTLOOK: MIDDLE EAST REGION?S OUTLOOK MAY BE CLOUDED BY SOFTENING OIL PRICES AND LACK OF PROGRESS ON IRAN?S NUCLEAR ENRICHMENT
The Middle East Region has had a sobering start to the year with earthquakes in Syria and Turkey. Early in February, oil prices increased in expectation of supply interruptions caused by the earthquakes. Exports from the Ceyhan terminal - a hub for oil exports from Iraq and Azerbaijan, and located on the Mediterranean coast - were halted. Investors remain jittery as China's demand is expected to climb again later this year, but there isn't much room for supply to grow. In the short term, we anticipate the oil price will be largely flat at its current level, with sporadic spikes. For oil-dependent GCC countries, on balance, prospects for 2023 look weaker than 2022.

Company :-Adfactors PR

User :- Mitanti Chowdhury

Email :-mitanti.chowdhury@adfactorspr.com