An Express View on the Global Recession: Gradually Slowing Down

The U.S. economy appears to be losing momentum, with some analysts predicting a recession later this year. The minutes of the last Federal Reserve meeting, released days ago, showed that Fed officials were “less confident” in the need for further rate hikes amid heightened economic risks. Indeed, Fed Chairman Jerome Powell has previously acknowledged the possibility of the US entering a mild recession. But the UK may be able to avoid a recession this year. The International Monetary Fund previously forecast the economy to contract by 0.3%, but now expects the economy to grow by 0.4% in 2023, driven by falling energy prices and healthy demand, although inflation remains high. With it stalled, interest rates are likely to rise. to keep the high. There are also concerns that China’s economic recovery is losing momentum, with some recent data well below expectations. Some analysts are already pricing in more support from the authorities. Singapore, a major transit hub for trade and capital flows, contracted in the first quarter (seasonally adjusted quarter-on-quarter) as China’s economy slowed and the global economic outlook deteriorated.

The impact of the global economic slowdown on India is already clear. After growing 17% in the first half of 2022-23 (April-September), the country’s merchandise exports plummeted in the second half (October-March) of 2022-23, contracting 3.7% as global demand weighed on. . Merchandise exports contracted another 12.7% in April 2023, with most non-food categories seeing declines. Exports of goods are unlikely to benefit India’s economy in the short term as global demand is likely to continue to be squeezed.