Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Saturday, Feb 24, 2024

Global recession likely in 2023 as inflation peaks: WEF chief economists

Global recession likely in 2023 as inflation peaks: WEF chief economists

Two-thirds of chief economists at the World Economic Forum have predicted a global recession in 2023 with continued geopolitical tensions, and further monetary tightening in the US and Europe.
The conclusion came in key findings of the Chief Economists Outlook, launched on Monday on the first day of the forum’s Annual Meeting in Davos, Switzerland.

Of the majority predicting a recession, 18 percent said it was extremely likely, against a third of respondents who thought the opposite.

The outlook in September 2022 was slightly less gloomy, when 64 percent of respondents stated that a global recession was “somewhat likely” in 2023.

Saadia Zahidi, managing director at the WEF, said: “With two-thirds of chief economists expecting a worldwide recession in 2023, the global economy is in a precarious position.

“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.

“Leaders must look beyond today’s crises to invest in food and energy innovation, education and skills development, and in job-creating, high-potential markets of tomorrow. There is no time to lose,” she added.

When surveyed about China, half of the respondents said they expected strong growth while the remainder predicted the opposite. Recent efforts to loosen the country’s zero-COVID policy were aimed at yielding a boost to growth, but it remained to be seen how disruptive the policy shift would be, namely in relation to health impacts.

Inflation was expected to vary significantly across regions, with 5 percent of the chief economists predicting high inflation in China, while 57 percent believed the surge would happen in Europe.

After a year of sharp and coordinated central bank tightening, the chief economists said the monetary policy stance would likely remain constant in most of the world this year.

A majority, however, expected further monetary tightening in Europe and the US – 59 percent and 55 percent, respectively. They highlighted that 2023 was likely to involve a difficult balancing act for policymakers between tightening too much or too little.

Business activity was also forecast to receive numerous blows in 2023. Nine out of 10 respondents expected both weak demand and high borrowing costs to weigh on firms, with more than 60 percent also pointing to higher input costs.

The chief economists expected the challenges to lead multinational businesses to cut costs, with 86 percent predicting that firms would reduce operational expenses, 78 percent expecting layoffs, and 77 percent seeing optimized supply chains this year.

The chief economists expected the global landscape to remain challenging for businesses – 100 percent of respondents said global geopolitical trends would continue redrawing the map of world economic activity along new geopolitical fissures and fault lines.

Such a wider economic shift would likely reverberate through trade, investment, labor, and technology flows, creating innumerable challenges as well as opportunities for business.

One positive signal was that supply chain disruptions were not expected to cause a significant drag on business activity in 2023.

While the forum’s Global Risks Report 2023 recently found the cost-of-living crisis to be among the world’s most urgent risks, the chief economists saw the crisis potentially nearing its peak, with 68 percent expecting it to have become less severe by the end of 2023.

A similar trend was evident in relation to the energy crisis, with 64 percent of respondents expecting some improvement by the year's end.

In addition, survey respondents highlighted several potential sources of optimism at the start of 2023, including the strength of household finances, growing signs of easing inflationary pressures, and continued labor-market resilience.
Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×