US – Recession or Not?
There are differing opinions among experts as to whether or not the US is heading into a recession this year….
Read moreWorld Bank forecasts 1.7% growth globally
Despite the fact that in 2022 the world economy was worth more than $100 trillion for the first time ever, mild recession is the generally agreed-upon global forecast for 2023.
Having previously projected a 3% growth for 2023, the World Bank has revised its estimates and is now predicting 1.7% growth. If this is correct, it will be, “The third weakest pace of growth in nearly three decades, overshadowed only by the global recessions caused by the pandemic and the global financial crisis (2008),” the World Bank reported.
In a very recent interview, the Director of the World Bank’s Prospects Group, Ayhan Kose, explained the situation from the World Bank’s perspective:
“This year the big headline is unfortunately, once again, that the global economy is in a tight spot. We downgraded our global growth forecast. We are now expecting global growth to be around 1.7%. This is close to half what we expected six months ago. So, the global economy is on a razor’s edge. Even a small shock can trigger an outright recession.”
Slowing growth affects 95% of advanced economies and nearly 70% of emerging markets and developing economies – with the potential for increasing poverty rates in some regions.
In an article entitled, Why a global recession is inevitable in 2023 Zanny Minton Beddoes, Editor-in-chief of The Economist, sums up the situation: “The world is reeling from shocks in geopolitics, energy and economics.”
The price of battling inflation
Kay Daniel Neufeld, Director and Head of Forecasting at Centre for Economics and Business Research (CEBR) says this comes, “As a result of the rises in interest rates in response to higher inflation.”
“The battle against inflation is not won yet,” the CEBR’s report added. “We expect central bankers to stick to their guns in 2023 despite the economic costs. The cost of bringing inflation down to more comfortable levels is a poorer growth outlook for a number of years to come.”
According to Bloomberg, “Our core scenario sees developed economies falling into a mild recession in 2023. The US will enter recessionary conditions in the first half, following the UK and Europe.”
An end in sight
On a more positive note, the report from Bloomberg added, “However, these recessions are
likely to be over by mid-2023 and the developed world could see a synchronized recovery
towards the end of the year.”
