Putnam Global GDP Nowcast | January 2023

The Putnam Global GDP Nowcast index is a proprietary GDP-weighted quantitative model that tracks key growth factors across 25 economies. This index and individual country indexes are used as key signals in Putnam's interest-rate and foreign-exchange strategies.

Inflation is peaking, but growth is flattening


Global growth remained on a downward trend in December.


Growth in G10 countries overall fell to contraction levels. Interestingly, in Central and Eastern Europe, the Middle East, and Africa, growth bounced back a bit to reach positive levels. Latin America, on the other hand, continued to slow. Growth in Asia also decelerated while remaining positive, supported by China's reopening.

The U.S. growth pace declined, reaching a level very close to neutral. The data was mixed in December. Job gains remained strong as total nonfarm employment increased by 223,000. The pace of job gains is slowing, and employment is being reallocated across sectors. Job gains are still well above the pre-Covid-19 pandemic average. Indicators such as the Markit U.S. Services PMI (Purchasing Managers' Index) have been slowing for months. The ISM Non-Manufacturing Index came down sharply.

Europe remained in contraction. The good news is that conditions are easing in both manufacturing and services, as indicated by the Eurozone PMI. New orders increased. Inflation dropped for a second month, as headline inflation declined to 9.2%. However, core inflation accelerated to 5.2% year over year in December.


This six-year illustration shows stable GDP up until the collapse from the coronavirus pandemic.

Feb '20–April '20

The Covid-19 pandemic causes a global economic downturn.

May '20–Dec '21

Global growth starts to surge and stays at elevated levels as life continues to normalize.

Jan '22–present

Rising interest rates and inflation, and the fallout from the Russia-Ukraine War, cut global growth prospects.

Source: Putnam. Data as of December 31, 2022. We base our Global GDP Nowcast on a tailored methodology that captures daily data releases for the most essential growth characteristics for each of 25 countries — including purchasing managers' index data, industrial production, retail sales data, labor market metrics, real estate price indexes, sentiment indicators, and numerous other factors. The mix of factors used for each market may change over time as new indicators become available from data sources or if certain factors become more, or less, predictive of economic growth.

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