Leading global economies may avoid sharp slowdown in 2023

The world’s leading economies are showing surprising resilience despite facing a perilous moment, according to research for the Financial Times that suggests the global economy may avoid a sharp slowdown this year, Report informs.

China, the US, the eurozone, India and the UK are all growing faster than had been expected late last year, the latest edition of the twice-yearly Brookings-FT tracking index found, with consumer and business confidence rising after a rocky end to 2022. As recently as January, central banks and institutions such as the IMF were bracing for a severe downturn.

China’s recovery would stem from the end of its zero-Covid policy and a slowdown in the subsequent wave of infections, with the country likely to reach its 5 percent growth target this year despite an increasingly state-dominated economy.

India was seeing the benefit of economic reforms of recent years and was poised for another year of strong growth, according to the index.

The Brookings-FT Tracking Index for the Global Economic Recovery (Tiger) compares indicators of real activity, financial markets and confidence with their historical averages, both for the global economy and individual countries.

The main composite index showed economic conditions to be close to historic averages both in advanced and emerging economies. While hard data had deteriorated since the autumn, confidence indicators had picked up as had financial markets, especially in emerging economies.

Leading emerging economies were benefiting from inherent dynamism and improved policy frameworks, but outside these economies the outlook was considerably worse, according to the Tiger index.

Low-income and frontier economies were suffering the most as a result of rising debt-servicing costs, weak export demand, and the limited ability of governments to stimulate growth while maintaining the confidence of international financial markets.