Real economic activity stayed fairly resilient – fourth quarter real gross domestic product (GDP) expanded in the United States (US) and Japan, and remained stable in the euro zone. But recent turmoil in the banking sector renewed fears of similar risks and weaknesses emanating in other economies and the hit to financial markets
Inflation softened, but stayed uncomfortably high in several key economies, leading to expectations of continue rate hikes, despite jitters in the financial markets
Energy prices continued to moderate, falling by 7.3% on-month
According to the interim economic outlook report by the Organization for Economic Cooperation and Development (OECD), global growth is expected to be slower at 2.6% in 2023 compared with 3.2% in 2022, as tightening monetary policy across the world will begin to affect economic activity. The 2.6% print is an upward revision from the OECD's initial forecast of 2.2%, because of the improving consumer sentiment and cooling commodity prices. China's reopening and subsequent economic recovery is expected to support global growth in 2023.
Monthly data shows that the US economy was strong in February, but recent developments in the banking sector have renewed recession fears. However, as inflation remains high in several key economies, further rate hikes are expected.
