The Day at a Glance | Sep 26 2022

The Top

*OECD maintains global growth expectations for 2022 (3%); cut 2023 estimates (2.2%).

*Mexico`s economy grew 1.3% annual in July, according to the IGAE.

*Container prices in China decreased to their lowest level since September of 2020 in light of weak growth in global demand.

*The US economy could log a “relatively ordered” slowdown: Raphael Bostic, Atlanta FED.

*Gediminas Smikus, member of the ECB, expects at least a 50bp increase in October`s meeting.

*The British Pound continues to decrease due to concerns of the fiscal deficit; it reached a record 1.03 against the dollar.

Economic environment

OECD economic perspectives. The Organization for Economic Cooperation and Development (OECD) made its global economic perspectives report public this morning; it didn’t change its global growth forecasts for 2022 (3%), but it reduced its growth forecasts for 2023 (2.2%). For the OECD, the outlook is deteriorating because of slower than expected growth, persistent negative impacts on growth and prices due to the conflict in Ukraine – and more widespread inflation that will remain in place for a longer period of time. Despite the fact that the COVID-19 pandemic has dwindled along with fewer cases at a global level, the global economy is expected to be weak in 2022 and 2023. This is due to high costs of the conflict in Ukraine and the aggressive monetary policy adjustments at a global level, which will be the main factors for slower growth towards 2023. Confinements and the real-estate crisis in China have also contributed to slower growth. The OECD forecasts growth will set at 3.2% in 2022 and 4.7% in 2023 in China, while for the United States, growth was revised to 1.5% in 2022 and 0.5% for 2023. For Mexico, the organization estimates that growth will set at 2.1% this year (vs 1.9% prev.) and at 1.5% in 2023 due to slower growth at a global level. The organization is concerned that inflation in energy and food prices has been passed on to other prices in the economy, which will start to create a more structural type of inflation along with higher wages; a sign that high prices will remain in place for a longer period of time. This implies more restrictive monetary policies around the world even though the OECD expects inflation to remain above central bank target levels in 2023.