(Tiper Stock Exchange) – A recession is almost certain this year: the majority of the economists interviewed at the World Economic Forum in Davosin Switzerland, the usual annual event that brings together the elite of the economy and central banks and which this year is facing a situation of great uncertainty, like never before. Most of the community of economists respondents predict a global recession in 2023believes that geopolitical tensions continue to have an impact on economic activity and anticipates further monetary tightening in the United States and Europe.
Almost two thirds of economists believe a global recession likely in 2023 and i18% consider it extremely likelymore than double the previous survey conducted in September 2022. The other third of respondents believe a global recession is unlikely this year.
“With two-thirds of leading economists expecting a global recession in 2023, the global economy is in a precarious position“, he claims Saadia Zahidinumber one of the WEF, urging world leaders to “look beyond the crisis to invest in food and energy innovation, education and skills development, and tomorrow’s high-potential job-creating markets”
There is a fort consensus that growth prospects in 2023 are bleak, especially in Europe and the United States. All the economists interviewed forecast weak or very weak growth in the EU in 2023 (in the previous survey the percentage was 86%), while 91% expect weak or very weak growth in the United States (it was 64% in the survey previous one).
For China, growth expectations are polarised: on the one hand those who expect weak growth, on the other those who believe that growth will be strong. The easing of anti-COVID measures is thought to give a boost to growth, but it remains to be seen how disruptive the policy change will be in terms of impact on health.
Regarding inflationeconomists see a certain geographic variability: only 5% of economists expect high inflation in China, while 57% provides a high growth in Europe. After a year characterized by the tightening of central bank monetary policies, the maintenance of an austere policy is expected again this year and the probability of further tightening this year remains high (59% in Europe and 55% in the United States).
Headwinds will curb trade in 2023: 9 out of 10 economists expect weak global demand and 60% believe firms will face higher input costs. These challenges are expected will lead multinational companies to cut costs and many economists expect companies to reduce operating expenses (86%), lay off workers (78%) and optimize supply chains (77%).
But there is also a positive fact which concerns the supply chains, which are not expected to cause further business disruptions and slowdowns in 2023.