- But recession is still likely
After three chaotic years, investors have several reasons to be cheerful about the world economy. In America inflation is tumbling, raising hopes of a “soft landing", in which price growth comes under control without a recession. Fortune has smiled on Europe, where a mostly warm winter has caused energy prices to plummet. And China’s economy, freed from Xi Jinping’s destructive “zero-covid" policy, is poised to rebound. Markets are joyous. The S&P 500 index of American stocks has risen by 5% since the start of the year. Share prices in Europe and emerging markets are up by even more.