Market: Global GDP growth could be halved in 2022, Morgan Stanley says


(Reuters) – Morgan Stanley expects global economic growth to halve in 2022 from a year ago due to risks from the war in Ukraine and the COVID-19 outbreak in China even as the central banks are tightening monetary policy to control soaring inflation.

Gross domestic product (GDP) will be 2.9% in 2022, the US investment bank estimates, around 40 basis points below consensus, after economic growth estimated at 6.2% in 2021.

“The deceleration is global, fueled by fading fiscal support, monetary policy tightening, the effect of COVID-19, ongoing supply chain frictions and, more recently, the fallout from the invasion. Russian in Ukraine,” Morgan Stanley economists wrote in a note dated Tuesday.

With Ukraine’s exit from the crisis looking unlikely and central banks’ efforts to rein in runaway inflation, Morgan Stanley economists expect economic growth to be limited.

While they believe that the slowdown in growth is widespread, Japan and India are the only two major economies that they believe will not suffer a marked slowdown.

(Report Siddarth S in Bangalore, French version Laetitia Volga, edited by Kate Entringer)

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