Global | Risk metrics show worsening growth/inflation trade-off
The global economic outlook appears to be deteriorating, according to our quarterly review of alternative measures of economic risk. Most of the metrics now point to weaker risk-weighted growth in 2021, with no catch-up in 2022.
The metrics we reviewed broadly support our overall risk assessment. Almost all agree with our judgement that risks to our baseline growth forecast lie to the downside. Most also align with our view that upside risks are still material, with evidence from past forecast errors suggesting notable upside potential.
What you will learn:
- Risk metrics suggest a worsening near-term trade-off between growth and inflation.
- Most forecasters previously attached an implausibly low probability to inflation surprises, whereas they now see a significant chance of elevated inflation over the next two years despite a weaker growth outlook.
- Both businesses and professional forecasters appear to see inflation as primarily a near-term concern.
Tags:
Related Services

Post
Latin America Key Themes 2024 – Slower growth, but it’s not all bad news
Growth in most LatAm economies will be below consensus. Economic momentum has surprised to the upside through most of 2023, but the full effects of record global and domestic monetary tightening are yet to be seen.
Find Out More
Post
Easing financial conditions offer CRE some respite
Our measure of financial conditions has become less restrictive in the US and started to loosen in the eurozone and the UK, reflecting investors' expectations that interest rates have peaked. This should aid the outlook for commercial real estate (CRE) on the margins, although the scale of past rate hikes, sluggish economies, and structural headwinds mean the sector still confronts challenging fundamentals.
Find Out More