(Adds details)
April 19 (Reuters) - Citigroup raised its 2023 global
economic growth forecast to 2.4%, citing "solid" performance in
the United States, euro area and China, and also pushed out its
expectation for a U.S. recession to the fourth quarter of the
year.
Citi economists had earlier pegged global growth at 2.2% for
the year and expected the onset of a recession in the United
States in the third quarter.
"Our outlook envisions that the acute financial stresses,
which last month triggered pressures on both sides of the
Atlantic, will continue to recede," Citi economists led by
Nathan Sheets said in a note.
Sheets was referring to the collapse of two mid-sized U.S.
banks last month and a forced takeover of Swiss lender Credit
Suisse by UBS , sparking worries about broader stress in
the banking system that is widely seen as being brought about by
global central banks' aggressive rate hikes to battle inflation.
Citi however, cuts its global economic growth forecast for
next year to 2.1%, from the 2.5% expected previously.
"While the acute phase of the banking tensions appears to be
abating, we continue to see chronic challenges associated with
higher interest rates and, more broadly, the implications of
this episode for bank assets, deposits and funding, and bank
margins," said Sheets.
These conditions could lead to a tightening of credit
conditions, including the possibility of a "credit crunch", he
said.
(Reporting by Susan Mathew in Bengaluru; Editing by Savio
D'Souza)
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