The post-Covid recovery has run out of steam. The latest update to the Brookings-Financial Times Tracking Indexes for the Global Economic Recovery (Tiger) shows that growth momentum, as well as financial market and confidence indicators, have deteriorated markedly around the world in recent months, many countries are either in or on the brink of outright recession.
Some wounds have been self-inflicted, like China's zero-Covid strategy and the United Kingdom's reckless "mini-budget". High and persistent inflation worldwide, and the actions central banks have taken to rein it in, are also depressing economic activity, weakening household and business confidence, and roiling financial markets.
In major advanced economies like the eurozone, Japan, and the UK, sluggish and tepid policy responses have compounded the effects. Many developed countries now face the challenges that have long characterised periods of economic and financial stress in emerging-market economies: steep currency depreciations (relative to the US dollar), rising government bond yields, strained public finances, and tightening policy constraints.
