The growth of the world economy is slowing down further. This is evident from our report on the economic outlook. Our research department predicts global GDP growth to be +2.9% in 2022 and +2.5% in 2023. That's -0.4pp and -0.3pp, respectively, lower than our calculation from three months ago.

Negative factors are piling up, such as the ongoing war in Ukraine, the measures taken by central banks to make borrowing more expensive and the enormous price increases (inflation) of especially energy, food and raw materials. As a result, companies and consumers are keeping a closer eye on their budgets. The question is whether we will end up in a recession. That is not the first scenario we expect. In the Eurozone, we saw that GDP growth held up remarkably well in the first half of 2022 despite numerous negative factors. Supply chains will recover in the near future, which is good news for the industry. If Russia decides to stop supplying oil and gas completely, the EU, in particular, will have to consider a recession.

We expect the volume of world trade (goods and services) to contract compared to the first quarter, by -1.3%. Overall, world trade growth (volume) will be +3.5%. Next year +3.6%. If we look at the value of world trade, we see a different picture. Due to the sharp price increases and the more expensive dollar, we see a value increase of +10.4% this year and +4.2% in 2023.
Businesses have to deal today with considerably higher costs. Energy costs, in particular, are rising alarmingly. The time for free money is also over. Interest rates in the US have been rising for some time, which is now also happening in Europe. We also see a less rosy picture in the area of personnel. Wage costs are rising, and many companies are also struggling to find suitable workers. Rising costs affect the profitability of companies. Sectors such as construction, energy, transport and computers & telecom are particularly affected.
Thanks to governments reaching out a helping hand, bankruptcies worldwide reached a record low last year. That time is over, and the number of bankruptcies is normalizing now. The number of bankruptcies worldwide will increase by +10% in 2022 and +14% in 2023. After two years of decline, bankruptcies in most countries are returning to pre-pandemic levels. For one in three countries, this will already happen this year, and for one in two countries in 2023.
The Chinese economy is now slowly reopening. With the removal of restrictions, there is now room to catch up. The whole world will benefit from this, although the power of the catch-up effect will be limited. The congestion in the Chinese ports will take some time to resolve. Next year we expect an average quarterly growth of 1% for the Chinese economy.
We expect inflation to peak in the coming six months, mainly due to the rise in energy and food prices. Global inflation will average 8.1% this year and 4.7% in 2023. It is difficult to predict how inflation will develop in the slightly longer term. Governments will try to curb inflation, especially in the EU, where energy prices have risen to record highs due to the war in Ukraine.
The US central bank (FED) is tackling inflation with significant interest rate cuts. As a result, the dollar has risen sharply in value. The ECB is slowing down but has also started raising rates. We expect the FED to raise interest rates to 3.5% by the end of 2022. In the Eurozone, that will be 0.75%. The question is whether the central banks will continue with the planned increases if the economy cools down significantly. There is a danger that interest rate hikes will reduce the demand for goods and services too much.
Now that interest rates are rising and the economy is weakening, the ghost of the debt crisis, as we saw earlier in southern European countries (2009/2010), looms. Greece currently has a debt of 180% of GDP. Italy is at 146, Belgium at 120, Spain and France at 117, and Portugal at 115%. Reducing government debt is difficult now that significant investments are needed in climate and defence plans. The question is how the EU will respond to these developments. There is now a lot of talk about suspending European fiscal rules until 2024.

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Oct 05, 2022

Low consumer price for basic energy needs

More and more households can no longer afford the energy bill. Our researchers argue for a fixed low price for basic energy needs. Read more.

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Sep 30, 2022

Missing chips cost EUR100bn to the European auto sector

No industry has been hit harder by the chip shortage than the automotive industry. We estimate that it led to a shortfall of about 18mn of vehicles around the world.

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Aug 31, 2022

Sharp decrease in inflation due to removing trade barriers

Our research department took a closer look at the effect of trade barriers on inflation. Find out the results of the study.

103 results