Signs of slowdown

Global growth seems to be moderating as gross domestic product (GDP) contracted in some key advanced economies in the third quarter of 2023. While GDP contracted in Japan (-2.9% annualized), the euro zone (-0.1%) and the United Kingdom (UK, -0.1%), the US economy remained resilient. It grew an annualized 4.9% compared with 2.2% in the previous quarter.

Central banks in many advanced economies stayed pat with their interest rates during their latest policy meetings. Key central banks have raisedrates by 400-525 basis points in the current interest rate cycle. Although inflation remains above their respective targets, it has moderated significantly over the previous year and growth seems to be slowing. The European Central Bank, at its November meeting, hinted at maintaining rates at their current levels for a sufficient duration will significantly contribute to achieving its target inflation rate.