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CIO Insights Resilience versus recession Macroeconomic and asset class outlook for 2023 01 Growth: stop and go Weak economic momentum is expected to continue into early 2023. Both Europe and the U.S. are caught between a restrictive monetary policy that curbs both inflation and the economy and an expansive fiscal policy aimed at bolstering the economy and cushioning the effects of the current energy crisis, among other things. For the Eurozone, this means that the ECB’s deposit rate is expected to increase to 3% during the course of the year, whereas Germany, for example, has planned fiscal measures equivalent to around 7.5% of its gross domestic product. We are expecting a mild recession overall in the Eurozone at the turn of the year. With recovery starting in the second quarter, economic growth for the full year 2023 is likely to be 0.3%. The main risk factor remains energy, coupled with a possible shortage of gas in winter 2023/2024. Figure 1: GDP growth forecasts Source: Deutsche Bank AG. Forecasts as of November 17, 2022. %YoY 2022 2023 U.S.* 1.8 0.4 Eurozone 3.2 0.3 Germany 1.8 0.0 France 2.5 0.3 Italy 3.5 -0.1 Spain 4.6 0.8 Japan 1.6 1.2 China 3.3 5.0 World 3.2 2.8 Note: *For the U.S., GDP growth Q4/Q4 % is 0.5% in 2022 and 1.6% in 2023. A soft landing is possible in the U.S. as well, with a marked economic slowdown so far not resulting in any significant increase in unemployment (and a still large number of unfilled vacancies). Growing evidence of a slightly downward trend in inflation in the U.S. could see the Fed refocusing increasingly on economic growth, with further increases in the base rate likely to be smaller than in the recent past. In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Performance refers to a nominal value based on price gains/losses and does not take into account inflation. Inflation will have a negative impact on the purchasing power of this nominal monetary value. Depending on the current level of inflation, this may lead to a real loss in value, even if the nominal performance of the investment is positive. Investments come with risk. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk. This document was produced in December 2022. 4

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