In 2023, initial optimism faded as inflation persisted, central banks remained inactive, and China’s recovery didn’t bolster global growth. Key issues resurfaced: access to affordable energy and the impact of monetary policy on financial stability. Coface made several adjustments to country and sector ratings, indicating a resilient yet uncertain economic outlook.
The year 2023 began with great enthusiasm, but in all likelihood it will not be the year that most observers were expecting. The 1st half of the year has reinforced some of our convictions:
no, inflation will not spontaneously and painlessly return to its 2% target in developed countries;
no, central banks will not “pivot” between now and the end of the year;
and no, the mere lifting of health restrictions will not enable China to play the role of relay engine for the global economy.
Two essential things that the market had lost sight of also came back to the fore: access to abundant, cheap energy remains central to the functioning of the global economic system, and monetary policy has more direct effects on asset valuations and financial stability than on consumer prices.The economic outlook remains closely linked to inflation trends and to the response of central banks, and our forecasts are subject to a number of downside risks, including the supply of energy and credit.Against this backdrop, Coface made 13 upgrades and 2 downgrades revisions to its country assessments, as well as 26 changes to its sector ratings (13 reclassifications and 13 downgrades). These underline an improvement in the outlook, but an environment that remains very demanding and uncertain.
The resilience of the global economy is confirmed, but the outlook remains gloomy
The growth figures for the…
