Recent Survey Data – GDP Growth and Inflation Forecasts

November 2022 Survey – Monthly Inflation Forecasts

Our monthly inflation (CPI) charts show recent actual outturns (blue) since July 2022 and consensus estimates (red) from this month’s survey up to January 2024.  Inflation pressures – heightened by the outbreak of war between Ukraine and Russia and subsequent energy/commodity price crisis – have led to monetary tightening from ultra-loose policy positions adopted by central banks to nurse economies through the worst of the pandemic.

On November 2, the Fed hiked the target funds rate by another 75 basis points, to the 3.75%-4.0% range. Fed officials are now considering whether to moderate the size and pace of rate hikes, especially as headline CPI looks to have peaked at 9.0% (y-o-y) in June. Nevertheless, headline CPI remains above 8%; furthermore, core PCE prices ticked up to 5.1% (y-o-y) in September, indicating the spread of price rises.

Taken from Consensus Forecasts – G7 and Western Europe, November 2022.


January 2023 Survey – Assessing 2023 GDP Growth and Inflation Expectations

After a torrid 2022 burdened by the energy crisis, soaring inflation and interest rates, forecasts for 2023 real GDP growth across the G7 & Western Europe look relatively bleak. The economies of both the US and the Euro zone are expected to grind to a halt, whilst the UK is forecast to decline by a full percentage point (-1.0%). UK forecasts for investment and manufacturing
output are also the worst-performing of all the economies surveyed here (see charts, bottom of page). The downturn in the outlook for 2023 began to accelerate fast after June 2022, under the strain of the cost-of-living crisis and an expected crash in consumption levels. The past couple of months, however, have seen a plateauing of 2023 GDP forecasts.

Japan is expected to be the best-performing economy in the G7 in 2023, along with having the lowest expectations of inflation. In the US, Japan, Germany and the UK, the expected crash in consumption has yet to fully materialise. Most Western economies may even be past their inflationary peak, and whilst most central banks are still hiking, they are also sounding more dovish. Interest rate cycles could peak in the next few months; the question now is how will long rates stay high? Global energy prices have also mellowed somewhat, providing relief for Germany which at one stage braced itself for the possibility of energy rationing. 2023 CPI projections have started to cool over the last few months (see chart, right), albeit at high rates of increase for most. In addition, core inflation measures have continued to advance.


Taken from Consensus Forecasts – G7 and Western Europe, January 2023.


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