Less “hard landing” is foreseen for her global economy its economists Citygroup, which are now slightly improving their growth forecasts. However, according to their estimates, the growth rate of world GDP this year will be the lowest in the last 40 years. In particular, they predict that this year the global economic growth will slow to 2.2%, that is, 0.25% higher than they predicted in their previous estimate. As they said in their statement, the reason is that global macroeconomic indicators seem to be improving.

They also clarified that the decisive factor that led to the upward revision of their forecasts was the fact that the image of the Chinese economy is improving, that it is showing resilience American economyBye Eurozone it appears to be in stagnation, but not in recession, as it seemed a few months ago.

However, the banking group does not miss the opportunity to emphasize that persistently high inflation at the global level may limit growth. As he points out, “we estimate that global inflation is still between 6% and 7%, well above the official targets of central banks.”

Citigroup’s estimates are largely in line with the views expressed last week by both Bank of America and Goldman Sachs, when they predicted that the Federal Reserve would be forced to raise dollar interest rates three more times this year and exceed 5%.

It should be noted that U.S. equities recorded a significant increase at the beginning of the year, after an extensive fall in 2022, and this was due to the prevailing assessment in the markets that inflation had already peaked and was on its way to slowing down, and therefore no longer will be followed by an aggressive increase in interest rates.

However, after the latest macroeconomic data showing that inflation remains persistently high, central banks have signaled to markets that further interest rate hikes are imminent. And, as Citigroup economists say, “everything points to the fact that interest rate hikes this year will be painful.”