Global growth is heading for an "increasingly synchronous downturn", economists at Barclays said on Thursday, citing a deepening energy crisis in Europe, continued lockdowns in China and tightening financing conditions across economies.
Barclays forecast a slowdown in global growth to 2.2% in 2023 versus 2.8% this year, and warned that it expects advanced economies to contract in the fourth quarter with zero growth next year. Global growth stood at 6.3% in 2021.
Central banks globally have been rapidly tightening monetary policies, on the heels of the Russia-Ukraine conflict that exacerbated supply-chain issues, to keep soaring inflation in check as economies are still recovering from the pandemic.
A slowdown in global growth will bring the world "close to a global recession," Barclays said, adding that much of the bad news was already out of the way.
"This is a poor economic outlook. But it could have been worse. There is a line between gloom and doom, and that is where we believe the global economy sits."
Indicators are sending mixed signals about the strength of the U.S. economy amid the Fed's tightening cycle, the brokerage said, adding that the United States will only be "narrowly" avoiding an outright recession next year.
Barclays expects a recession in Europe in the first half of 2023 and forecast that China will see a small bounce in fourth-quarter GDP growth, below its target of 5.5%, with the brokerage also cutting the country's 2023 GDP growth by 80 basis points to 4.5%.
