Monthly Economic Wrap

During July:

  • According to the International Monetary Fund, global growth is projected to fall from an estimated 3.5% in 2022 to 3.0% in both 2023 and 2024.
  • While the forecast for 2023 is modestly higher than predicted in the April 2023 World Economic Outlook, it remains weak by historical standards. The rise in central bank policy rates to fight inflation continues to weigh on economic activity.
  • Global headline inflation is expected to fall from 8.7% in 2022 to 6.8% in 2023 and 5.2% in 2024.
  • Underlying core inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward.
  • Share market performance was positive for the month of July. The S&P 500 posted a solid return of 3.1%, while the Australian S&P 200 rose by a similar, but slightly lower amount of 2.9% on a price basis.
  • Global shares ex-Australia produced a favourable return of 2.1% on an unhedged basis and 3.1% on a hedged basis.
  • In Australia, Value and Value-Weighted were the best performing styles for the month. Globally, Small Caps and Value-Weighted were the best performers from a style perspective. Energy stocks advanced on expectations of tighter supply and positive growth data. Certain media and technology giants made strong gains, as did a number of banking stocks.
  • Within Fixed income markets, Australian government bonds and credit both gained ground this month. The main Australian fixed interest index, the Bloomberg AusBond Composite 0+ Years Index was up 0.5%, while the Bloomberg AusBond Credit 0+ Years Index gained 0.8%.
  • Global High Yield bonds, as measured by the Bloomberg Barclays Global High Yield Total Return Index Hedged into AUD gained 1.7% for the month.

Read more in the Monthly Economic Wrap here.


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