Economic And Financial Trends June 2023

“Emerging markets and Developing Economies (EMDEs) growth rate is projected to reduce to 3.9% during 2023 (PY 4%) owing to geopolitical tensions, high inflation, varying consumption momentum, oil production cuts, interest rates hikes and supply chain bottlenecks. GCC growth rate is also expected to decline due to fall in oil prices and impact of above factors.

FY 2023 to date, has also seen China’s bounce back with lesser COVID-19 restrictions and easing of supply chain bottlenecks along with a strong growth in India’s economy boosted by government and private capital spending, a growing manufacturing sector and service exports. However, the close escape of US debt ceiling crisis and aggressive money tightening along with a persistently high inflation and ongoing geopolitical uncertainties in Europe poses a potential risk to the global growth during this year and next.

The GCC growth rates however has witnessed a steep decline to 2.9% (PY 7.7%) as a result of stubborn inflation on food, housing prices and commodities, tighter credit conditions, and OPEC+ production cuts. Despite these challenges, GCC economies’ non-oil growth levels remain strong due to their revenue diversification initiatives, labor and fiscal reforms. It is driven by a strong performance of their travel, leisure, business tourism, infrastructure, service sector and real estate sector.

Our detailed quarterly review as enclosed, thus illustrates the major economic and financial trends prevailing during 2023 across the region/rest of the world, to help you understand the current challenges and how economies are dealing with them.”

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