Furthermore, inflation is also decreasing. “On the one hand due to the statistical effect and on the other hand because the interest rate hikes that central banks have implemented since the spring are finally starting to curb monetary depreciation,” says Mujagic. This means that the situation is normal for the first time in a long time.
According to Mujagic, this is also attributable to growth estimates, where not long ago it was feared that only a few countries would avoid a recession. Now it’s exactly the opposite: “In Europe there are two countries that will experience a very mild recession,” he continues. “But otherwise there’s growth everywhere.”
Little recession
While big countries like the UK and Germany are concerned, Mujagic points out that Germany in particular is experiencing a very mild recession. For example, the IMF forecasts an economic contraction of 0.1% for Germany, “so just one thing – like another mild winter – and they’ll be above freezing again.”
Of course, that medal also has a downside, Mujagic acknowledges. The IMF therefore takes into account a scenario in which there is room for low growth with high risks. So it could still be rumbling in the financial sector, because we’re about to end a period of about ten to fifteen years of zero to negative interest rates. “That interest rate has now gone up and that exposes problems,” he continues. “And that can easily lead to tension.”
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If things get out of hand, the IMF has estimated that economic growth would be two percent lower than in the baseline scenario, in which the IMF assumes three percent growth, according to Mujagic. “And that’s very, very low.”