• United States (US) inflation accelerated on-year in June to another multidecadal high
  
• China's second quarter gross domestic product (GDP) reading slowest in two years
  
• Non-energy commodity prices (metals, agri goods) cool off in June
  

Elevated international commodity prices, disruptions to supply chains (from the Russia-Ukraine conflict, after-effects of the pandemic, and China’s zero-Covid-19 policy-related restrictions), consequent acceleration of inflation and tightening financial conditions are all pointing towards one direction – a steeper slowdown in global growth. The World Bank (June 2022) now sees risks to global macro-outlook – including a stagflation-like scenario in 2023. It stated that the response of advanced-economy central banks to inflation (in the form of aggressive monetary policy tightening) could possibly lead to financial stress in emerging-market economies. Accordingly, the World Bank expects global GDP to slow to 2.9% in 2022, down 1.2 percentage points (pp) from its previous January outlook. Forecast for 2023 is revised down to 3% (0.2 pp lower). Amid these gloomy projections, talks of recession are gaining prominence in the US. In Europe, higher prices and deteriorating trade balance are expected to impinge on growth, according to S&P Global (June 2022). The Bank of England (BoE) now expects inflation to reach double digits by October. In the east, a slowdown in China is apparent, with second quarter GDP the slowest since the pandemic first hit in 2020.