Samir Assaf, Chairman of the Board of Directors of HSBC Middle East and Principal Adviser to General Atlantic, said that the Bank and the International Monetary Fund have re-established their expectations for the growth of the global economy to 1.6% in 2023, and therefore it is expected that there will be no recession in the US economy, but rather it will achieve a growth of 0.4% in 2023. , and 1.3% in 2024, while the growth of Europe’s economy will be at “zero” level.
Assaf expected, in an interview with Al-Arabiya channel, today, Thursday, that the German economy would contract by 0.7%, and that the growth of the economy of France and the rest of Europe would be positive.
He continued, “The economies of Asia will represent a happy surprise in 2023, and the first quarter of this year will be very difficult in China, but it will return to be one of the managers of the global economy, starting from the second quarter of 2023.”
And he said Chairman of the Board of Directors of HSBC Bank Middle EastIndia’s economy will remain strong and will grow by 5% in 2023. Although growth is less than 2022, it will remain strong, as well as the economies of Southeast Asia, which will support the global economy.
“Britain will be the weakest link in 2023 and 2024, with an expected contraction between 1.2% and 1.3% this year,” Assaf said.
He explained that inflation is a great evil on the economic, political and social side, and therefore central banks will continue to increase interest rates to fight inflation.
“The US Federal Reserve is expected to raise interest rates between 5% and 5.25%, an increase of 1% this year, and interest rates will not fall before mid-2024, until the inflation rate drops to 2 or 3%,” Assaf said.
And the Chairman of the Board of Directors of HSBC Middle East suggested that the European Central Bank would raise interest rates more than expected to 3.5% in 2023, and that the Bank of England would raise interest rates by 4 to 4.5%.
“Interest rates in emerging economies are in a good position, and those economies will wait to know the state of economic growth before moving interest rates. We prefer bonds over stocks in 2023 and 2024, because interest rates and bond returns are what they should be, and with returns of 5 and 6%, those must be added.” Investments in the portfolio, and the share of bonds should be 50 or 60 percent in the investment portfolio, and the same applies to value stocks over growth stocks,” according to Assaf.
In the first and second quarters of 2023, European markets are preferred over American ones, as well as emerging markets over developed ones.
He expected a further decline in the dollar’s price, which is currently high by about 25%, after it passed an exceptional year last year as a result of the war and the fear of it by resorting to the dollar. He attributed the expected drop in the dollar to several factors, including the central banks’ lack of interest in increasing their dollar deposits, because they are afraid of a large increase in their portfolios.
On gold, Assaf said that usually in light of high interest rates, gold prices decline, but they began to rise again because with high inflation, people resort to gold, and central banks also raised their purchases of gold, to increase its share in their portfolios. Gold prices are expected to remain around their current prices.
Regarding cryptocurrencies, Assaf said that their risks are high, but they will not disappear, and they are not favored by regulations and laws in their current form and have caused disasters without control over them, and they will continue to decline because their current value is higher than it should be.
