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20 Jan, 2023 05:24

Top economists warn of global recession

A World Economic Forum survey suggests major economies are facing a slowdown due to inflation
Top economists warn of global recession

More than half of the leading economists polled by the World Economic Forum (WEF) say they expect a global recession in 2023. The results were published on the WEF website on Monday as business and government leaders gathered for the annual meeting in Switzerland.

A survey conducted by the WEF was based on 22 responses from a group of chief economists drawn from international agencies including the International Monetary Fund, investment banks and multinational companies.

Almost two-thirds of respondents believe a global recession is likely in 2023, of which 18% consider it “extremely likely” – twice as many as in a previous poll carried out in September 2022. Only one-third of experts surveyed said a recession was unlikely.

Senior economists forecast “significant regional variations” in the inflation outlook for 2023 with 57% of respondents sharing high inflation expectations for Europe, while just 5% of experts foresee the same for China. The report showed that, year-on-year, the proportion of respondents who expect high inflation in Europe increased from 47% to 57% since September 2022.

“The current high inflation, low growth, high debt and high fragmentation environment reduces incentives for the investments needed to get back to growth and raise living standards for the world’s most vulnerable,” WEF Managing Director Saadia Zahidi said in a statement commenting on the survey results.

The survey comes shortly after the World Bank’s latest report, in which it slashed 2023 global growth forecasts to levels approaching a recession as many countries struggle with energy, inflation, food and security crises.

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