Have you gotten used to writing “2023” yet?
We have another post that summarizes an economic publication’s predictions for what’s ahead in 2023. Barron’s analysis is similar to several other publications, which contributes to the overall gloom and doom of the economy.
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Barron’s says there are a number of risks and uncertainties on the horizon for the global economy. One factor is the ongoing COVID-19 pandemic, which has had a significant impact on the global economy and is likely to continue to do so in the coming year.
Another risk to the global economy is the state of the financial markets. The market has been highly volatile in recent months, and the performance of the markets can have ripple effects throughout the economy. Rising interest rates and inflation could also impact the market and the wider economy.
Political uncertainty is also a risk to consider. In the U.S., the administration and the divided Congress will have to navigate a number of challenges. In Europe, the Brexit process and the future of the European Union are also potential sources of uncertainty.
Finally, the state of the global economy is closely tied to the actions of central banks, such as the Federal Reserve and the European Central Bank. Any changes in monetary policy or unexpected events could impact the market and the wider economy.
Barron’s doesn’t mention what is happening in China specifically, but there are some interesting things happening there because of COVID and the government’s very restrictive quarantine policies intended to contain the virus.
Their real estate sector is deeply troubled, too. Right now, the default rate (actual default plus technical default) of Chinese real estate USD bonds has risen to over 50%. Over 50% of these bonds have fallen to below $30.