The results signal another challenging year for risk assets after central bank tightening, surging inflation and impact of Russia’s invasion of Ukraine have fueled the worst equity rout since the global financial crisis. Against this grim backdrop and as stocks have rallied in the fourth quarter, over 60% of survey participants said investors around the world are still too bullish on asset prices.
Stagflation is the key risk for the global economy in 2023, according to investors who said hopes of a rally in markets are premature following this year’s brutal selloff.
Almost half of the 388 respondents to the latest MLIV Pulse survey said a scenario where growth continues to slow while inflation remains elevated will dominate globally next year. The second most likely outcome is deflationary recession, while an economic recovery with high inflation is seen as least probable.
