The global economy expanded solidly in the second quarter of 2023, but without much momentum. I expect Europe – especially Germany and the United Kingdom – to experience a recession in the winter half-year.
The economy in the euro area is stagnating. Gross domestic product fell slightly in the winter half-year, by 0.1 percent in both the final quarter of 2022 and the first quarter of 2023. Private consumption in particular is weakening.
The US politicians have once again made things exciting.
The U.S. economy is in turmoil and exposed to high risks. The banking stress, the debate about raising the debt ceiling, higher interest rates, geopolitical tensions, and the weakening global economy are likely to lead to a recession this year.
The global economy will recover only sluggishly this year with growth of 2.8 percent and next year of 3.4 percent, especially as no tailwind is expected from monetary and fiscal policy.
I am still rather pessimistic regarding the coming quarters for the U.S. economy. A recession is increasingly likely.
The economic situation remains very uncertain. It is rightly pointed out, for example, that the labor market is still robust. But the first dark clouds are already gathering on the horizon, even for the labor market.
Recession, yes or no. That has been the big question for several months now.
After the midterm elections in the U.S., there is hardly any time to take a deep breath on the political level.
I expect a mild recession, but only a sluggish recovery thereafter at the end of 2023 and in 2024.