India, Asean To Lead Rebound From Upcoming Global Recession, Says Nomura’s Subbaraman


The recession, which threatens to grip nations like the U.S. and Europe, will be a long-lasting one, persisting throughout the next year with a quarter-on-quarter contraction, he said, citing reasons such as cost of living crisis and aggressive monetary policy tightening.

On top of that, the central banks are not going to quickly come to the rescue, the analyst said, adding that the inflation is still too high compared to their targets.

“We expect recessions across the US (-1.0% y-o-y in 2023 from 1.8% in 2022), Euro area (-1.6% from 3.2%) and UK (-1.4% from 4.3%), with global GDP growth slowing to 1.2% from 3.0%,” Nomura said in its Dec. 7 investor note .

A recession in the developing markets, the note said, should unleash faster disinflation in Asia from the second quarter of 2023. Rate hike cycle has reached its finale and the brokerage expects policy rate cuts in the second half of 2023 and into 2024.

Even China is going through a “bumpy” recovery, according to Subbaraman. The Asian country is witnessing a rise in coronavirus cases which is likely to result in disruptions in the short term.

But “once the global dust settles, we expect Asia to outperform, with the region attracting large capital inflows, owing to its better growth prospects and stronger fundamentals,” Nomura said.


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