• United States (US) government revised upward third quarter real gross domestic product (GDP) growth to 3.2% from 2.9% earlier; United Kingdom (UK) economy grew mildly in November
  
• Inflation continued to soften in key advanced economies but remained significantly above their targets
  
• Crude oil prices were sharply down in December on-month, but non-energy prices were marginally up
  

The World Bank, in its January 2023 Global Economic Prospects report, pointed to a “sharp, long-lasting slowdown.” It warned that any new adverse development amid the current fragile economic conditions could tip the global economy into recession. It reduced its 2023 global growth forecast to 1.7% from 3.0% projected in June 2022, led by slower growth in key advanced economies. "The world's three major engines of growth – the US, the euro area (EA), and China – are undergoing a period of pronounced weakness, with adverse spillovers for emerging market and developing economies," the bank added.

While the latest available data from at least two of these three major regions gives some reason to cheer for now, the growth path ahead is uncertain and faces headwinds.

Meanwhile, major central banks are continuing their inflation fight, with the peak in interest rates still to come in most economies. While pauses — and perhaps even pivots — are expected at some point this year, economies will still bear the full-blown impact of tighter monetary policy actions of last year.