Mapping the global economy in the second half

Entering the second half of the year, financial market risks are becoming more apparent. Investors believe the risk of recession is increasing, resulting in volatile financial markets. We believe there are five major risks associated with five economic areas, as follows:

First, the US economy has started to suffer from rising costs. GDP in the first quarter contracted by 1.5% from the fourth quarter of last year, due mainly to increased prices of imported goods, while exports slowed in line with the global economy.

Leading economic indicators, such as the Institute of Supply Research Purchasing Managers’ Index (ISM PMI), have begun to slow down sharply, reflecting the rising cost of production and rising wages. The University of Michigan consumer sentiment index was the lowest…