IIF releases global macro report on rising global recession risk
Institute of International Finance (IIF) cut Euro zone growth in 2022 from 3 to 1 percent almost two months ago in its recent report, Global Macro Views – Rising Global Recession Risk.
Because the statistical carryover from 2021 into this year is 1.9 percent, the report said this a recession forecast that anticipates falling GDP in the second half of the year. Forward-looking indicators like the IFO expectations component have fallen sharply, which suggest the Eurozone economy is deteriorating, the report said. Since IIF made this change, the Omicron wave in China looks worse than expected, which signals GDP contraction in the second quarter, with high frequency soft data already pointing that way. Furthermore, a disorderly tightening in U.S. financial conditions is playing out, with the rise in real long-term U.S. interest rates now comparable to 2013. The reports said this rapid tightening in U.S. financial conditions risks further destabilizing the global growth