The Day at a Glance | October 5 2022

*WTO forecasts a strong slowdown in global trade in 2023.

*ECB could carry out more moderate interest rate increases in 2023: Francois Villeroy, member of the ECB.

*OPEC+ considers carrying out a production cut in Vienna and will make a decision starting November.

*Consumer confidence logged marginal progress in September (+0.1 to 41).

*The Central Bank of Spain cut its 2023 economic growth forecast in half (1.4%e.).

*Mortgage rates in the US increased to their highest level in 16 years (6.75% 30-year financing).

*COVID-19 cases in China increased to their highest level in two weeks over the festive weekend.

*Economic indicators: Private employment exceeded in the US exceeded forecasts (208k vs 200ke.).

Economic environment

Negative outlook for global trade. The World Trade Organization (WTO) assured that global trade will slow down considerably in the next year due to multiple shocks that are affecting the worldwide economy, such as the war in Ukraine, energy costs in Europe and the US monetary policy. These factors are expected to increase production costs in manufacturing activities and decrease available income among homes at a global level. Because of this, the organization forecasts global trade will merely grow 1% in 2023, a considerable revision to the previous 3.4% figure. For 2022, the figure was revised upwards from 3% to 3.5%. Director of the World Trade Organization, Ngozi Okonjo-Iweala, affirmed that the worldwide economy could be steering towards a recession, and that the outlook is worse than they had previously expected. Aggressive interest rate increases could cause a recession in some countries and decrease global demand, which boosts trade. However, the worst will be seen among the poorest countries; higher imported costs of fuel, food and fertilizers could continue despite the recession – with negative consequences for food security in many of these countries as well as a worsening in indebtedness levels.