Global Economic Conditions Survey Q2 2022 points to weak growth
The Q2 Global Economic Conditions Survey (GECS) 2022 builds on the Q1 results but suggests a more challenging global economic outlook now in the near term, with a steeper economic deterioration.
Risks are rising, but a global recession should be avoided
The latest GECS report points to rising risks particularly due to the Ukraine crisis and consequent challenge of inflation in many markets across the world with many of the main indicators in the report falling.
In particular, the confidence amongst finance professional on the global economy has dropped significantly across four indices dimensions including general confidence, capital expenditure, business orders and employment though these indices remain above the levels identified during the Covid crisis, with specific concerns expressed on both customer order and suppliers going out of business.
A key narrative from the report is extreme uncertainty, weakened growth and an inflationary global economy which is driving a fall in real wages which in turn is putting pressure on private demand and household consumption. This cost of living crunch is particularly impacting low income households in advanced economies and low and middle income countries.
Regionally compared to the Q1 results more respondents expect increased interest rates across their region in response to higher inflation, as well as supply shortages and supply chain disruption. Concerns about rising costs are very evident from the latest research, with the percentage of respondents citing this as a key risk at its highest level since the survey was started in 2012. However, the overall conclusion from the report is that global economic growth will remain positive, albeit very weakened.
