Quarterly Review: Q2, 2023
The latest activity and survey data suggest that GDP growth slowed in advanced economies in Q2, while in China the reopening rebound seemed to fizzle out in May. For example, the latest PMIs showed manufacturing output fell for the first time in five months in June, while services activity – which had been resilient – slowed too.
Meanwhile, the significant tightening in financial conditions is already weighing on credit growth in advanced economies and most are likely to fall into mild recessions later this year.
Headline inflation is now falling sharply globally, but core rates are proving stickier in most places.