Is a global recession likely? 🤔

Going into 2023, many investors were concerned about a global recession. However, economic data has generally been resilient and is causing some investors to revisit their outlooks for the rest of the year.

What does this mean for investors?
As this year has progressed, strong numbers in the Purchasing Managers’ Index for the services sector have surprised commentators, casting doubt on concerns over a global recession.

According to the International Monetary Fund, the chances of recession remain high, but there are caveats to this. It is worth remembering, global economies are still recovering from the pandemic with many consumers still having savings from this period to spend.

Central banks are also focused on reducing the high levels of inflation, which is an important backdrop. Interest rates are likely nearing their peak, support is coming through from lower energy prices, and unemployment remains low. Therefore, any recession could be mild.