after a year of doubledigit inflation in many countries ubs is now forecasting sharp disinflation in 2023 the swiss investment bank says weak growth alongside mechanical indicators such as easing supply chain bottlenecks and rising goods inventories will reduce the inflation rate next year also known as disinflation the us consumer price index data on thursday showed the annualized rate of inflation in the united states fell to 77 in october  down from 82 in september our baseline is one where growth is weak and inflation declines rapidly the bank said in its global economics  markets outlook for 2023 on nov 7 a lot of the disinflation is mechanical and will be down to luck foodenergy but we believe most pipeline indicators now suggest the us and others are clearly shifting into a more disinflationary environment the bank screened for stocks it expects to be positively impacted in such an environment the table below shows two stocks across four regions that ubs says will benefit the most from disinflation the bank recommends being overweight health care communication services and information technology while being underweight energy industrials and financials in a disinflationary environment british healthcare companies genus and hikma pharmaceuticals ranked highly among the stocks ubs says will benefit from disinflation in the united kingdom median analyst price targets give the stocks potential upside of 297 and 385 respectively according to factset ubs screen also indicated that danish health equipment maker ambu and belgian supermarket retailer colruyt will be the most positively impacted by disinflation in the european union chinese stocks such as food ingredients maker yihai international and education services provider new oriental stood out in the asia pacific region while american bond trading platform marketaxess and household products maker clorox ranked highly among the north american stocks ubs expects to benefit from disinflation the swiss bank admitted that if its forecasts are wrong on inflation however the downside would be significant the negative payoff from getting our disinflation call wrong is large strategists led by arend kapteyn warned they said the sweetest spot for markets historically was when core inflation hit an annualized rate of 18 a level the bank expects in 2024 if were wrong the analysts said about their forecast the valuation adjustment needed would see the s  p 500 at 2550 few places to hide then but dollar assets particularly the us value trade should do least worst the s  p 500 closed at 374857 on thursday