World Bank, OECD Both Reduce Global Growth Estimates

What happens abroad impacts MSCI members in North America. Here is the latest economic, trade, and other policy news of note for the last week:

• The World Bank reduced its annual global growth forecast to 2.9 percent for 2022 from the 4.1 percent growth it predicted in January. The bank also said that “subdued growth will likely persist throughout the decade due to weak investment in most of the world” and the “overlapping crises” of repeated COVID-19 lockdowns in China, the highest inflation in decades, and Russia’s war in Ukraine. Read the World Bank’s full report here. New forecasts from the Organization for Economic Cooperation and Development (OECD) also indicate reduced expansion. Specifically, the OECD estimates three percent global growth in 2022 and a 2.8 percent expansion in 2023. Those numbers are down from its December forecast, when the OECD projected the global economy would grow 4.5 percent this year and 3.2 percent in 2023. The OECD sees U.S. growth slowing to 2.5 percent this year and 1.2 percent in 2023. Read the full report here.
• The Global Steel Users Purchasing Managers Index (PMI) fell from 50.5 in April to 49.7 in May. Asia-based firms recorded their strongest declines in two years, while European companies saw the weakest expansion for 21 months. U.S. firms did slightly better and U.S. output growth at a 10-month high. Read the full report here.
• The Global Aluminum Users PMI fell from 50.3 in April to 49.4 in May, marking the first deterioration in the health of the sector since January 2022 and the sharpest downturn in two years. The decline in Asia accelerated to the steepest since February 2020, while the United States and Europe recorded the slowest growth rates in three and 20 months, respectively. Read the full report here.
• The Global Copper Users PMI fell from 51.0 in April to 49.6 in May, signaling the first downturn in overall operating conditions in 23 months. While U.S. and European copper users continued to see upturns, their growth rates eased in comparison to April, with Europe seeing the slowest improvement in 21 months. Conditions in Asia deteriorated at the sharpest rate for four months. Read the full report here.