Global experts assess the business climate in the global market
The German institute analyzed the business climate in the market as reflected in the Ifo index. According to this index, there was an increase in business activity in March 2023. This was the fifth consecutive increase. For the month, Ifo increased by 2.2% to 93.3%. The improvement in the business climate was not affected by the uncertainty facing German banks.
The survey interviewed 9,000 companies operating in various sectors of the German economy. Most of them note a positive sentiment. Business is optimistic about the future and is planning new projects.
Other experts also point to good prospects for the global economy in the coming years. For example, Goldman Sachs identified the lifting of tough restrictions related to COVID-19 outbreaks by China as the main growth driver in 2023. At the same time, the company expects a modest growth of the global economy of around 1.8%. The market has not yet recovered from the difficulties of 2022: geopolitical conflict and record-high inflation. However, there are positive dynamics associated with slower price growth. No recession is forecast in the USA and Europe, as has been the case. However, an increase in key interest rates will limit the development of local economies. We should be prepared for the fact that they will recover extremely slowly.Morgan Stanley believes investors will continue to be guided by a wait-and-see strategy. Their activity declined significantly in 2022. For now, they are acting rather cautiously, preferring not to risk capital in a weakened market.
Bank of America expects the equity market to recover after the second half of 2023. As for the bond sector, it is already showing good momentum. Such developments will allow for more effective portfolio diversification after a problematic declining activity. Economic conditions and trends in the dollar exchange rate are having a positive effect on emerging markets. In addition, analysts point out the advisability of investing in small-cap stocks.
Experts of the BlackRock investment company believe that after a long period of stability, the global market is now going through a new stage characterized by high volatility. Sooner or later, it may lead to a recession, also facilitated by tightening regulatory policies. As a result, securities will remain undervalued for some time. At the same time, analysts hope that risky assets will become more resilient by the end of the year. According to BlackRock, the market needs a new investment strategy, as old mechanisms are no longer effective.
Overall, all experts are inclined to believe that 2023 will be a better year for global processes than the previous year. However, many problems still need to be solved.