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The global loan market endured a bleak first half of the year, with the overall 1H23 volume falling 28% year-on-year (YoY) to USD 1.9trn, the lowest showing since 2012. Macroeconomic conditions remained challenging, with news flow suggesting that the US and European economies faced a tough outlook amid persistent inflation and tightening monetary policies. Nevertheless, Asia-Pacific recorded the largest decline in loan activity in 1H23 when compared with previous years, despite being the region with the fastest economic growth.

While loan volumes in the Americas and EMEA fared relatively well amid unprecedented central bank interest rate hikes, a US recession would put a further dampener on global loan activity. However, the consensus forecast on the start and depth of the recession has been continually shifting, with expectations leaning towards a soft landing.

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