Two-thirds of public and private sector chief economists surveyed by the WEF (World Economic Forum) expect a global recession to be likely in 2023, but pressure on energy, food, and inflation may be peaking.
Almost 2/3rd of chief economists believe a worldwide recession is likely in 2023, of which 18 percent consider it extremely likely, more than twice as many as in the last survey conducted in September 2022. A 3rd of respondents consider a global recession to be unlikely this year, the WEF said on Monday as leaders from govt, and business, among others, congregate in Switzerland, and Davos, to address the states of the world and discuss priorities of the year ahead.
Almost 2/3rd of chief economists believe a worldwide recession is likely in 2023
The result of the survey was based on twenty-two responses from a group of senior economists drawn from international agencies such as investment banks, International Monetary funds, and multinationals, among others.
There was a strong consensus the growth prospects in the year 2023 look bleak, especially for the United States, and Europe. Globally, World Economic Forum said, businesses are expected to reduce costs significantly in response to economic headwinds, but chief economists were optimistic about inflation and strong balance sheets.
All the chief economists surveyed expect weak or very weak growth in Europe, while 91 percent expect weak or very weak growth in the United States in 2023. In China, expectations of growth are polarised, with respondents almost evenly divided between those who expect weak or strong growth.
Many of WEF’s community of chief economists expect to geopolitical tension continue to shape the global economy
They added, At the same time, some economies in the South Asia region, including India, and Bangladesh may get benefit from global trends such as diversification of manufacturing supply chains away from China.
On inflation, the survey saw many variations: the proportion expecting high inflation this year ranged from just 5 percent for China to 57 percent for Europe, where the impact of last year’s rise in the price of energy, which has spread to the wider economy.
Many of WEF’s community of chief economists expect to geopolitical tension continue to shape the global economy and further anticipate the monetary tightening, especially for the United States, 55 percent, and Europe, 59 percent.
With 2/3rd of the chief economists expecting a global recession in 2023, the global economy is in a risky position. The current high inflation, high debt, low growth, and high fragmentation environment cut incentives for the investments needed to get back to growth and living standards for the world most at risk. World Economic Forum MD Saadia Zahidi said in a statement. Leaders must look beyond today’s crisis to invest in food & energy innovation, education & skills development, in job-creating high-potential markets of tomorrow. There is no time to lose.