Economic and Market Outlook: Running up the hill

Global growth is entering a soft patch this year as uncertainty due to geopolitical risks remains high. 

Obesity: Costly epidemic

The share of people who are overweight and obese has been increasing markedly, even in poorer countries, a trend that was likely amplified by the lockdowns imposed during the Covid-19 pandemic.

 

Commercial debt collection: USD4.2trn at risk in the most complex countries

As central banks around the world tighten monetary policy to cope with surging inflation, financing costs are set to rise for companies, contributing to the return of business insolvencies. In this context, recovering debt could become even more of a challenge.

 

 

A trade recession before a mild Chinese reopening?

Prepare for a contraction in global trade in Q2 2022…With the omicron crisis in China prolonging supply-chain bottlenecks and bringing port congestions back to the worst levels seen in 2021, global trade of goods in volume terms should decline by -1.3% q/q. 

Eleven countries at high risk of a food crisis

The war in Ukraine has affected food availability as the country supplied 12% of the world’s grains. While there is still enough to feed the planet, ensuring access is key to avoid a global food crisis, especially as shortages of grain and fertilizer, alongside climate change and lingering pandemic-driven supply-chain issues, have pushed up global food prices by +56% compared to end-2019. 

Can the European consumer hold on?

Consumers were meant to drive the post-Covid-19 recovery in 2022, but elevated geopolitical uncertainty and sky-high inflation have derailed these expectations. Following Russia’s invasion of Ukraine, consumer surveys suggest that Eurozone households are as pessimistic – or even more – as they were during the height of the pandemic. 

ECB: Hike while you can!

At tomorrow’s policy meeting, the ECB will sound the starting gun for its first rate-hiking cycle since the Global Financial Crisis. We expect the ECB to announce the end of net asset purchases and to pre-commit to a 25bps rate hike in July – the first one in 11 years. 

The great green renovation: the buildings sector transition

The EU’s targets for reducing emissions are not ambitious enough to meet the Paris climate goals: Taking into account its “fair share”, calculated by dividing the remaining carbon budget by its share of the global population, the EU needs to slash emissions by 65% by 2030 instead of the aspired 55% and achieve climate neutrality by 2040, 10 years earlier than currently planned. 

Rallying ruble and the weaponization of finance

Against initial expectations, comprehensive sanctions did not plunge Russia into a currency crisis. Unlike other emerging market currencies during times of stress, the Russian ruble experienced a short-lived depreciation.