BBVA Private Banking presented its outlooks on the economy and markets, with experts noting that 2023 could mark a recovery for global financial markets even though the year may remain highly complex for economic activity. Equities are seen as having a reasonable path to reclaim losses from 2022 relatively quickly, while fixed income may take longer to bounce back, though the year could prove more favorable for this asset class.
BBVA Research revises 2022 growth higher across nearly all regions, suggesting a stronger starting point for 2023 despite ongoing risks. In Spain, growth is forecast at 1.2 percent for the coming year, accelerating to 3.4 percent in 2024 once some uncertainties affecting households and businesses ease.
Across Europe, the pace of economic slowdown is expected to remain modest, given the energy crisis. The euro area’s GDP could effectively stall in 2023 after expanding 3.2 percent in 2022.
In the United States, the forecast is for slightly positive GDP growth in 2023 after 1.9 percent in 2022, reflecting a delayed impact of monetary tightening aimed at curbing inflation. China is projected to grow about 5 percent in 2023, up from roughly 3.6 percent in 2022.
Regarding inflation, BBVA Research highlights that peaking inflation is likely in the United States. Europe, however, faces more uncertainty as the market watches for a confirmed downward trend in prices. The easing of core inflation has been slower, partially offset by the moderating influence of lower energy costs.
energy and oil
Experts note that the trajectory of raw materials, especially energy commodities, will continue to shape the risk landscape in 2023. A large portion of the disinflationary trend depends on oil and natural gas prices staying away from the peaks observed in the summer. Sustained price discipline in energy markets would support inflation declines in the months ahead.
market evolution
On markets, the view is that 2023 could be a year where fixed income leads, while equity markets improve but may not surge as rapidly. The message from experts emphasizes caution regarding the pace of improvement in equities, particularly in the early part of the year, recommending a careful stance when betting heavily on stock exposure.
mega trends
Looking ahead, analysts say megatrends should still command attention. Even with a mixed year behind, many identified long term themes are expected to sustain growth, and the companies operating in these areas are likely to show notable improvements in sales and profits as technology, sustainability, and digitalization continue to drive demand.