• Gross domestic product in the US, euro zone and Japan grew in the last quarter of 2022
  
• Inflation continued to soften in key advanced economies, but remained higher than central bank targets
  
• Energy prices moderated despite a slight uptick in Brent crude price
  

Despite several headwinds, global gross domestic product (GDP) growth forecast for 2023 was revised from 2.7% to 2.9%, signaling that the expected global recession will not be as severe as previously feared. According to the International Monetary Fund (IMF), “adverse risks have moderated” since its previous World Economic Outlook, released in October. Global inflation is expected to be lower on-year in 2023, but will remain above the pre-pandemic average and higher than central bank targets.

While risks have reduced, the global economy remains vulnerable to the geopolitical fallout from the Russia-Ukraine conflict. Increasing crude oil and food grain prices and formation of trade blocs due to intensification of the conflict remain risks to the economy.