The lack of energy supply globally caused by the Russia-Ukraine conflict, pressure on prices and the Fed's rate hikes, and the reopening story in Asia will continue to shape global economy in the coming months, said Sean Taylor, CIO Asia Pacific and head of emerging market equities at DWS, at a market outlook briefing. He sees opportunity in selective, diversified portfolios.
DWS has adjusted economic forecasts in light of the uncertainty over Russia and Ukraine. Taylor expects the conflict in Ukraine to cause elevated prices to continue and put more pressure on inflation, and that Europe would face more of a negative impact than the United States or Asia due to its geographic proximity and high reliance on Russia for energy supply.
In a base-case scenario that there is no major recession in Europe, no spread of conflict, and Europe's oil and gas supplies will not be adversely affected in the long term, DWS’s GDP forecast for Europe was lowered from 4.4 percent to 2.
