RWI Konjunkturberichte

Against the background of high inflation and the continuing tense geopolitical situation, the global economy remains in a weak phase. This is affecting the manufacturing sector in particular. At the same time, global trade in goods showed a marked decline over the winter. By contrast, the picture for services is more positive. In the first quarter of the year, production growth in the major economies varied. For example, the USA continued to record positive growth and in China there was a strong increase in GDP following the easing of measures to combat the pandemic. In the euro zone, however, GDP declined slightly. Given that many commodity prices, particularly energy prices, have fallen significantly, inflation rates are also falling appreciably. However, in many places they are still at a very high level. This also applies to core inflation. Against this background, the central banks have significantly increased their key interest rates. This is likely to dampen investment activity over the forecast period. Nevertheless, the global economy is expected to continue its gradual recovery. The decline in inflation rates and rising wages are expected to support private consumption. However, following an increase of 2.9% in the previous year, global growth is expected to remain subdued at 2.5% this year and 2.4% next year. Inflation is also expected to fall further due to the dynamics of energy prices. However, at 4.6% it is still expected to remain high this year, before falling to 2.7% next year. Alongside geopolitical risks, price developments pose a significant risk to the further development of the global economy. Even more persistent price pressures could have a stronger dampening effect on consumption and above all lead to central banks having to tighten their monetary policy even more. This would further hamper economic growth and pose risks to financial stability and debt sustainability.

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