The World Economic Forum’s Community of Chief Economists predict a global recession in 2023 due to continued geopolitical tensions and further monetary tightening in the United States and Europe.
According to the World Economic Forum’s Chief Economists Outlook survey, a global recession is likely in 2023, but food, energy, and inflation pressures may be peaking.
What does the World Economic Forum latest survey say?
Most chief economists believe a global recession will occur in 2023; 18% consider it extremely likely – nearly twice as many as the previous survey conducted in September 2022. Approximately one-third of respondents think that a global recession is unlikely this year.
Also, all chief economists surveyed predict weak growth in Europe in 2023, while 91 percent of them predict weak growth in the United States. In the last survey, the corresponding figures for Europe and the US were 86 percent and 64 percent, respectively, which indicated there had been an increase in consumer sentiment in recent months.
Europe is likely to suffer from the deepening effect of the ongoing conflict in Ukraine as well as sharp interest rate increases,” the Forum’s report said. Growth in the US was also hampered by tighter monetary policy.
Meanwhile, the Middle East and North Africa as well as South Asia were considered to be the strongest performers with the strongest performance. Bangladesh and India, among others, were seen as benefiting from a global trend away from China.
Additionally, the survey showed significant regional separation in growth expectations within a general trend of weakened growth expectations as compared to the last survey. It appears that the outlook for 2023 in China is polarised. Currently, more than half of respondents are expecting weak or very weak economic growth in China, while almost half are expecting moderate to strong economic growth.
The majority of respondents in the Middle East and North Africa (MENA) expect moderate or strong growth in 2023. Although this overall proportion has slightly declined since the September edition of this report, the expectation of strong growth has increased from 12-15 percent to 18-19 percent.
In East Asia and Pacific region, 37 percent of chief economists are expecting weak economic growth in 2023, and 63 percent of them are expecting moderate or strong economic growth, similar to September’s prediction. The last survey revealed that expectations for growth have fallen from strong to moderate.
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