The global economic outlook has deteriorated in the last quarter. As a result, we have revised down our baseline forecast for key indicators, particularly in the very near term, reflecting:
- The invasion of Ukraine, which we are assuming to be relatively short-lived and that global recovery remains robust by post global financial crisis standards
- Sharply higher inflation is adding to the squeeze on households’ real incomes and prompting more rapid monetary policy tightening
Our latest Global Risk Survey identified the downside risks to this baseline. Along with a possible upside from economies learning to live with endemic Covid. The pandemic endgame.
We have also published an alternative baseline forecast to illustrate how the baseline may evolve if fighting in Ukraine lasts well into 2023.
To find out more, fill in the form to download the executive summary of this quarter's Global Scenario report.
This quarter's Global Scenario report
Why the Global Scenario Service?
The Global Scenarios Service employs the Oxford Economics Global Economic Model to explore the implications of key risks to the world economy. Each quarter our economists survey clients for input on the scenarios that we should develop and analyse their impact on our baseline forecast.
Five-year forecasts and scenarios
Coverage of 80 individual economies, covering the developed world and the bulk of world GDP, plus the Eurozone and world aggregates.
A report describes the baseline forecast and how each scenario develops, together with the headline results.
Access to a databank that allows users to quickly build custom queries with complete flexibility and view the data in tables, charts, and maps.
Forecasts cover key variables for output, spending, employment, inflation, interest rates, balance of payments, and government finances.
This quarter's scenarios
Persistent inflation. Near-term supply disruption exacerbates underlying inflationary pressures, resulting in subpar growth throughout the scenario.
Long Covid. The spread of Omicron is followed by the emergence of new variants, resulting in a protracted period of public health restrictions.
Central bank overreaction: Withdrawal of central bank
policy support triggers market turmoil and property market correction, weighing on activity in the near term.
End of pandemic: Fading coronavirus concerns drive a more rapid return of confidence, leading to a sharp consumer-led global economic recovery.
Alternative baseline: Fighting in Ukraine lasts well into 2023, the west imposes further sanctions, and Russia retaliates by restricting gas supplies
A snapshot of the scenarios dashboard
Our alternative baseline illustrates how the baseline forecast might evolve in the event of a more protracted and severe conflict. This quarter’s scenarios also quantify other key risks , relating to: (i) Covid 19; (ii) supply chain disruption; (iii) inflation more broadly; (iv) the unwinding of consumers’ excess savings; and the associated (v) market impact, (vi) policy response, and (vii) economic scarring.
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