Economic Outlook Q2 2022

• The last few years have seen a seemingly unending string of adverse shocks hit the world, disrupting the normal course of economic activity and, more generally, everyday life.

• And, while the New Year began with hopes of much-needed calm on the horizon, the last three months have seen the emergence of new downside risks that have weighed on anticipated growth momentum and reverberated through global financial markets.

• But, though it may well be the case that the outlook now is not as optimistic as it was a few months ago, with forecast confidence intervals widening and rising recession risks becoming a focal point of discussions, the backdrop is still far from dour.

• In fact, the base case expectation remains that global growth will be sustained at rates still notably above pre-crisis trends, with the pace of expansion likely to perk up in the coming months as pandemic-related restrictions are further scaled back and activity more broadly returns to pre-crisis levels.

• Add to that the fact that investor sentiment is highly depressed and year-do-date market weakness has made valuations more compelling, and it is arguable that there is still reason to fight back urges to materially scale back risk exposures at this juncture.

View the full analysis below.

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