The Asia-Pacific Region will Lead the World in Economic Growth in 2023, According to a new Report from S&P Global.

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According to S&P, Asia-Pacific will experience real growth of around 3.5% in 2023, while Europe and the United States will likely experience recession.

According to the report, the region will dominate global growth in 2023, thanks to regional free-trade agreements, efficient supply chains, and competitive costs.

According to S&P Global Market Intelligence, Asia-Pacific economies will dominate global growth in the coming year.

According to S&P, the region will experience real growth of around 3.5% in 2023, while Europe and the United States are expected to experience recession.

Asia Pacific will dominate global growth in 2023, supported by regional free-trade agreements, efficient supply chains, and competitive costs, S&P predicted in a note.

The firm reduced its global real GDP growth forecast by 0.6 percentage point from 2% last month to 1.4% in 2023. This is a significant decrease from the 5.9% global growth rate in 2021, and it is even slower than the 2.8% growth rate predicted by S&P for 2022.

While a negative outlook outside of Asia-Pacific casts a shadow on the global economy, S&P believes the world will be able to avoid a full-fledged recession.

The world economy can avoid a downturn with moderate growth in Asia-Pacific, the Middle East, and Africa,” said Sara Johnson, executive director of economic research at S&P Global Market Intelligence.

Global economic conditions continue to deteriorate as inflation remains uncomfortably high and financial market conditions tighten,” she said, predicting a recession in Europe, the United States, Canada, and parts of Latin America in the coming months.

The company also stated that diversifying its trade “away from mainland China” would benefit Southeast Asia and India.

During a period of market volatility, India has benefited from being an outlier economy with relatively robust growth.

According to the CNBC Supply Chain Heat Map, China is losing more of its manufacturing and export dominance, which is largely due to its zero-Covid policy.

S&P expects global real GDP to rise to 2.8% in 2024 and 3.0% in 2025, based on its expectations for inflation to moderate and monetary policies to ease in the coming years.

Recession in U.S., Europe

According to S&P, the economies of Europe and North America, which account for more than half of global output, are likely to enter a recession in late 2022 or early 2023.

The note stated that “exceptionally high inflation is draining purchasing power and will lead to declines in consumer spending.” “Softening demand and tightening financial conditions will have an impact on housing markets and capital investment in both Europe and North America.

According to S&P, the expected contractions in the United States and Europe will have a global impact via trade and capital flows.

Fitch Ratings predicts the US economy will enter “genuine recession territory” in the second quarter of 2023, though it will be mild by historical standards.

The projected recession is very similar to the one that occurred in 1990-1991, following similarly rapid Fed tightening in 1989-1990.” However, downside risks stem from nonfinancial debt-to-GDP ratios, which are much higher now than in the 1990s,” said Olu Sonola, head of regional economics in the United States.

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