Stocks

BARCLAYS: Investor fear and revision Global growth at a 40-year low in 2023Nov 18, 2022

Economists at Barclays downgraded their forecasts for global economic growth in 2023 as inflation is unlikely to fall sharply, forcing monetary policy to be “tight”. Also has warned that 2023 looks set to be one of the weakest in four decades, with advanced economies likely headed into a recession.

They now forecast global growth of 1.7% year-on-year, compared with September’s forecast of 2.2%. For the current year, the growth will end up at 3.2%. So far though except for the housing market where activity has taken a big hit, particularly in the US, policy tightening has not affected large parts of the economy. But that will change next year.

Recession fears have gripped investors as central banks around the world rapidly tighten monetary policy to keep soaring inflation, exacerbated by the Russia-Ukraine war, under control. The escalating energy crisis in Europe and the ongoing lockouts in China have also added to the global economic woes.

The advanced economies are expected to contract throughout 2023, with recessions in the UK and the Eurozone starting in the third and fourth quarters of 2022 respectively. For the US, the recession is estimated longer leading to a contraction in the gross domestic product of 0.1% in 2023. For China, it forecasts 3.8% growth below consensus, given the slow move away from zero-covid policies, rising cases, and a sluggish real estate sector. For India, it should be one of the biggest contributors to global growth next year, but it is not a large enough economy to change the global outlook, therefore will grow over 5% annually in 2023.

BARCLAYS: Investor fear and revision Global growth at a 40-year low in 2023. Monthly Chart
Barclays Monthly Chart

Barclays is listed on the London Stock Exchange and NYSE. From an Elliott wave perspective, it can be forming a big monthly bullish a-b-c-d-e triangle pattern that can take some time, maybe years before we will see a bullish breakout. So, seems like we will most likely see it trading sideways between 20 and 5 area until triangle fully unfolds. Once a triangle is fully completed and the price starts breaking above 30, then we can expect a bullish resumption and rally towards all-time highs.

by Stavros Chanidis

Check also our latest analysis about UK FTSE100 Index. CLICK HERE

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