According to the Credit Suisse Investment Outlook 2023 published today, the year ahead will see low global economic growth of merely 1.6%. Although central banks will likely slow or end monetary policy tightening in 2023, we expect no rate cuts in any of the major economies. Against this backdrop, fixed income assets are likely to offer attractive opportunities for investors, while equity performance is seen staying muted, at least in the first half of the year.
After a challenging year in 2022, which saw persistently high inflation, aggressive central bank tightening and slowing growth, Credit Suisse expects 2023 to see recessions in the Eurozone and UK, and a growth recession in China. These economies should bottom out by mid-2023 and begin a weak, tentative recovery – a scenario that rests on the crucial assumption that the USA manages to avoid a recession. We expect economic growth to generally stay low in 2023 against the backdrop of tight monetary conditions and the ongoing reset of geopolitics.
Michael Strobaek, Global Chief Investment Officer at Credit Suisse, said: “We expect financial market volatility to remain elevated as risks persist and global financial conditions remain tight. This is likely to create continued headwinds to growth and, by extension, risk assets. To manage this difficult environment, it is key to adhere to robust investment principles, follow a stringent investment process aligned with investors’ long-term financial objectives and seek broad diversification including alternative investments.”