Invesco outlook calls for central banks to pause in 2023, paving the way for a recovery to start

Invesco outlook calls for central banks to pause in 2023, paving the way for a recovery to start

- Invesco strategists are transitioning to a less defensive position within model asset allocations, as they believe markets are moving from a contraction regime towards a recovery regime

- European economy is at greater risk of recession than the US

- From a regional perspective EM assets are preferred in a recovery regime

- Real Estate is a favoured asset

Dubai: Invesco, one of the world's leading independent global investment management firms, recently released its macro and investment outlook for 2023 calling for financial markets to transition to a recovery regime in anticipation of central banks ending their respective tightening cycles, which is likely to lead to an eventual economic recovery. Invesco’s base case scenario anticipates a moderation of inflation, resulting in a pause in central bank tightening around mid- 2023. We expect a rising global risk appetite to reflect a positive repricing of recession risks in terms of timing, duration or magnitude, while we continue to assess the full impact of past monetary policy tightening, with its long and variable lags.

Invesco’s Kristina Hooper, Chief Market Strategist, believes that currently “Global economic growth is below trend and decelerating. “The global contraction is likely to be modest, though some economies may be hit harder than