Citigroup forecasts more robust growth for the global economy

Citigroup economists stated that the global economy would likely show robust growth this year. They raised their forecast for global growth on Wednesday. Despite that, the world’s economy is rebounding at its slowest pace in the last 40 years. It still hasn’t shaken off the COVID-19 pandemic-induced recession.

According to Citigroup, the economy will grow by about 2.2%. This estimate is 0.25% higher compared to the previous one. Macroeconomic trends are improving, adding to growth. Besides, China seems to be gaining its footing steadily after its opening several weeks ago. The world’s second-largest economy maintained the coronavirus lockdowns and restrictions for the longest period among the other countries. But reopening helped it rebound after the lean years.

New reports also showed in the United States and Britain, business activities are flourishing. Both countries proved to be more resilient than analysts gave them credit for. While all of these gave economists hope, inflation remains high in most countries. Thus, they need to continue hiking interest rates to bring it down. That, on the other hand, might cause economies to sink back into recession.

Sheets noted that global headline inflation currently remains roughly in the 6-7% range. That is well above major central bank targets. The brokerage reiterated Goldman Sachs and BofA views, stating that the US Fed would likely increase rates thrice in 2023. Thus far, US stocks are rallying worldwide. They showed especially strong gains at the beginning of 2023.  

Hong Kong aims to support struggling economy 

Hong Kong introduced its new plan to support its economy. The coronavirus pandemic hit it hard. Thus, the government decided to aid citizens, hoping for a rapid recovery. The plans involve giving people cash handouts. The authorities will also ease stamp duties for buyers who are purchasing their first property. The city approved its new budget on Wednesday.