(Reuters) – Citigroup raised its global growth forecast slightly on Wednesday and now forecasts a “softer” landing for the economy, while the expected pace of growth is expected to be the weakest in 40 years.
Economists at the US bank now forecast global growth of around 2.2% this year, up 0.25% from the previous estimate. In a note, they explain this increase by improving macroeconomic trends.
According to Citigroup, China’s economic outlook is now stronger and clearer, while in the eurozone the economy is expected to stagnate rather than contract, and in the United States it is showing resilience.
The bank notes, however, that the persistence of high inflation around the world could temper the expected growth.
“By our calculations, headline inflation is still between 6% and 7%, well above the targets of major central banks,” said Nathan Sheets, economist at Citigroup.
Echoing interest rate forecasts issued last week by Goldman Sachs and BofA, Citigroup said it anticipates three more rate hikes from the US Federal Reserve (Fed) this year, which would bring the “fed funds” target “beyond 5%.
(Report Aniruddha Ghosh in Bangalore; Claude Chendjou, editing by Kate Entringer)
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