- China’s economy expanded by 2.9% in the fourth quarter of 2022.
- The BOJ is under pressure to alter its interest rate policy as soon as Wednesday.
- Services inflation in the United States will probably continue to rise annually.
Equity losses grew on Tuesday as China published disappointing fourth-quarter economic results. Still, expectations for a strong comeback in the nation remained high despite growing worries that the world economy is on the verge of a recession.
According to National Bureau of Statistics data released on Tuesday, China’s economy expanded by 2.9% in the fourth quarter of 2022 compared to the same period a year earlier. It exceeded expectations but highlighted the costs incurred by a strict “zero-COVID” policy.
3.0% growth in 2022 was far less than the official target of 5.5%. Except for a 2.2% expansion following the initial COVID-19 impact in 2020, it was the poorest performance in nearly 50 years.
Redmond Wong, a market strategist at Saxo Markets Hong Kong, said investors would ignore the Q4 GDP figures and pay more attention to 2023.
According to Chinese media, over half of the 31 provinces and municipalities that have published work reports for 2023 are aiming for higher than 5.5% growth rates.
The BOJ is under pressure to alter its interest rate policy as soon as Wednesday after the central bank’s attempt to give itself some breathing room backfired and encouraged bond investors to test its resolve.
On Monday, European equities climbed to a level not seen in nearly nine months as global equities maintained their New Year’s surge on expectations of a recovery in China’s economy and a lessening of price pressures in the US and Europe.
According to ANZ analysts in a research study released on Tuesday, how soon inflation will decline and whether or not major economies will be able to avoid tough landings are at the center of the early 2023 financial market debate.
Although the fact that energy and commodities prices account for a substantial portion of the decrease in inflation in the US is concerning, the report indicated that it was still positive.
As long as there is a supply-demand imbalance in the labor market, services inflation in the United States will probably continue to rise annually.
The World Economic Forum in Davos surveyed chief economists from the business and governmental sectors, and two-thirds expected a global recession this year. This points to tough times ahead.