The outlook for the United States, Euro area and Japan presents a mixed picture. If current trends are any indication, global recovery in the near-term would be led by the United States. However, the widened and historically high twin deficits, in fiscal and current accounts, of the United States pose the threat of possible disruptive adjustment of the US dollar against other major currencies.
Russia's war against Ukraine, the energy crisis, the monetary policy response to tackle inflation, the risk of recession, the state of labour markets and supply chains as well as the ongoing impact of China's approach to managing the pandemic have created a very uncertain economic path. Increasing price pressures across the world are putting a squeeze on real incomes and undermining macroeconomic stability.