Economic Update September 2022
Summary
Advanced economies continue to navigate a challenging environment. Inflation remains elevated and central banks have signalled that a painful period of adjustment lies ahead. Households are set to bear the brunt of this and plunging consumer confidence
points to increasing recession risks.
Developed Economy Consumer Sentiment*
Source: IFM Investors, National Providers, IMF, Marcobond. *GDP weighted
Markets are still sensitive to inflation and monetary policy news and the trading environment continues to be challenging with high equity and bond correlations and volatility. The outlook for growth is clouded and a likely drift to below-trend
rates is beset by downside risk. Much more uncertainty lies in the inflation outlook: has it peaked, will it come down and how much economic damage will be done in the process?
In Australia, we remain of the view that the pace of economic growth will decelerate markedly through the remainder of the year and into 2023. This will come as higher interest rates and elevated inflation weigh heavily on the household sector.
And we have long been of the view that the economy will recover to a pre-pandemic state in which economic growth is over-reliant on the expansion of the population and lacks meaningful productivity improvements.
About the author
Chief Economist
Alex Joiner, PhD
Joined in 2016
Alex Joiner is Chief Economist at IFM Investors. He is responsible for the firm’s economic, financial market and geopolitical risk analysis that is key in IFM’s investment process. In this capacity he engages with IFM’s domestic and global clients on macro-investment trends and themes. He is a frequent commentator on economic and markets via traditional and social media and regularly speaks at public forums and conferences. He has over two decades of professional experience in economic and markets and prior to joining IFM was the Chief Economist at Bank of America Merrill Lynch (Australian & New Zealand) after being a senior economist at ANZ Bank. He holds a First Class honours degree in Economics and a PhD in Econometrics from Monash University. Alex is also committee member of the Australian Business Economists.
About the author
Economist
Frans van den Bogaerde, CFA
Joined in 2019
Frans supports the Chief Economist with the firm’s economic, financial market, and policy analysis and forecasting. He holds a Bachelor of Commerce (Finance & Economics) with Honours in Finance (First Class) from the University of Melbourne. Prior to joining IFM Investors Frans was undertaking his Honours degree and was a researcher with the Brain Mind and Markets Lab at the University of Melbourne.
About the author
Economist
Lea Jurkovic
Joined in 2022
Lea supports the Chief Economist with the firm’s economic, financial market, and policy analysis and forecasting. She holds a Bachelor of Arts (Japanese studies) and Bachelor of Economics (Economics and Econometrics) with Honours in Economics (First Class) from the University of Sydney. Prior to joining IFM Investors Lea was an economist at the Reserve Bank of Australia with experience in domestic markets and Asian & International economics.