• The United States (US) and euro area (EA) economies performed better than initial estimates in the second quarter, but outlook remains marred by risks
  
• Inflationary pressures across major advanced economies have pushed central banks to hike rates aggressively, fuelling fears of a global recession
  
• While international food and crude prices continued to soften, coal and natural gas prices firmed up in August
  

The gross domestic product (GDP) growth rate of major advanced economies was revised marginally upwards in the second quarter, reflecting enhanced economic activity as economies reopened up with receding pandemic fears. However, the economic momentum is increasingly slowing down with real household incomes being hit by high inflation. At the same time, central banks around the world have become aggressive with rate hikes to get inflation under control, which will further suppress demand in the economies.

The World Bank recently noted that central banks around the world have been raising interest rates this year with a degree of synchronicity not seen over the past five decades – a trend that is likely to continue well into next year. As a result of this, 'the world may be edging towards a global recession in 2023 and a string of financial crises in emerging market and developing economies that would do them lasting harm', the World Bank concurred.