Gibson Shipbrokers: Weekly Tanker Market Report - Economic Turbulence
Gibson Shipbrokers: Weekly Tanker Market Report - Economic Turbulence
The recent OPEC+ decision to cut production targets by 2 mbd from November onwards given concerns about a deteriorating economic outlook took many by surprise. However, dark clouds over the global economy are indeed gathering. The International Monetary Fund (IMF) recently updated its world economic outlook, noting a notable deceleration in GDP growth. The latest projections are for world economic activity to increase by 3.2% in 2022, down from 6% last year. This slowdown largely reflects major cooling in the biggest economies: US GDP contraction in 1H 2022, Euro area contraction in 2H 2022 and covid restrictions in China. A further slowdown in economic growth is expected next year, with global GDP anticipated to increase by 2.7%. The IMF stresses there are huge downside risks, with main sensitivities centered around further US dollar appreciation, energy, and food price shocks; ongoing tightening in financing conditions, geopolitical fragmentation, and a worsening of several property crises, as well as Covid restrictions in China.
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