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Consensus global growth forecasts have improved slightly since last month as economies continue to look somewhat resilient relative to previous expectations. Bloomberg consensus estimates for world GDP bumped up to 2.6% for 2023 (from 2.4% last month and 2.1% to start the year). Growth estimates for US, Europe and China have all been revised upwards over the past couple of months.

Inflation continued to be a headwind globally and the European Central Bank (ECB), Bank of England (BoE) and the Federal Reserve (Fed) increased their respective policy rates in May.

We continue to expect an economic downturn in the US in 2023. The economy appears to be crawling to recession as opposed to “falling off the cliff” due to a profits recession and/or industries going bust. That said, we are seeing better performance from equities and credit spreads. This could be reflective of a resilient economy. The US GDP report showed strong consumer spending at 3.8%, while disposable personal income was super strong at a 7.8% quarter-over-quarter annual rate.[i] The potential for a wage price spiral is likely concerning to the Fed. We believe persistent economic resilience and sticky inflation could prompt it to hike rates to 5.75%.


[i] Bureau of Economic Analysis, 27 April 2023.

By The Loomis Sayles Macro Strategies Group

The information in this article is provided for general information purposes only and does not take into account the investment objectives, financial situation or needs of any person. Investors Mutual Limited (AFSL 229988) is the issuer and Responsible Entity of the Loomis Sayles Global Equity Fund (‘Fund’). Loomis Sayles & Company, L.P. is the Investment Manager. This information should not be relied upon in determining whether to invest in the Fund and is not a recommendation to buy, sell or hold any financial product, security or other instrument. In deciding whether to acquire or continue to hold an investment in the Fund, an investor should consider the Fund’s Product Disclosure Statement and Target Market Determination, available on the website or by contacting us on 1300 157 862. Past performance is not a reliable indicator of future performance. Investments in the Fund are not a deposit with, or other liability of, Investors Mutual Limited and are subject to investment risk, including possible delays in repayment and loss of income and principal invested. Investors Mutual Limited does not guarantee the performance of the Fund or any particular rate of return.

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