Citigroup has revised its 2023 global economic growth forecast to 2.4%, up from the earlier prediction of 2.2%, according to a Reuters report. The revised forecast reflects the strong performance of the US, Euro area, and China. Citigroup's economists have also pushed back their expectations of a US recession to the fourth quarter of 2023. The recent financial stresses that triggered concerns about the banking system's broader stress have started to recede, according to Nathan Sheets, the lead economist at Citigroup. While the acute phase of the banking tensions appears to be abating, chronic challenges associated with higher interest rates and their implications for bank assets, deposits, funding, and margins still exist. Citigroup has also reduced its global economic growth forecast for 2024 from 2.5% to 2.1% due to these challenges, which could lead to a credit crunch.
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