Several leading economists have made grim predictions about whether the global economy will fall into recession in 2023, according to a World Economic Forum (WEF) survey released Monday.
In the World Economic Forum’s Survey of Senior Economists’ Expectations, 63% of the senior economists surveyed indicated that they had expectations that the global economy would experience a recession this year. Of that number, 45% said it was “somewhat likely” and 18% said it was “very likely”.
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According to the World Economic Forum, the proportion of senior economists who put the possibility of a global recession at “very high probability” has more than doubled compared to those who thought so in September.
32 percent said one was “very” or “somewhat” unlikely.
The survey found that economic growth expectations differ by region.
The top economists surveyed were most pessimistic about Europe, with 68% expecting “very weak” growth and 32% saying “weak”. For the United States, 82% expect “weak” growth while 9% say “very weak” and “moderate,” respectively, according to the poll.
South Asia and the Middle East and North Africa (MENA) regions had the most positive outlook for economic growth. About 70% of the chief economists expect moderate or strong growth in the Middle East and North Africa region, while 85% said so for South Asia.
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The Survey of Senior Economists’ Expectations also asked senior economists to think about how inflation is going to occur in different regions.
More than three-quarters of them said they expect moderate inflation in the US in 2023 while 24% said it will be high. In Europe, 43% expect moderate inflation and 57% expect a rise.
The chief economists also thought inflation would be moderate at 55% or as high as 45% in Latin America and the Caribbean. Many expected moderate inflation in other regions as well.
Meanwhile, China’s inflation rate was expected to be “very low” in 2023 by 48% of the chief economists. The same percentage said they had expectations of moderate inflation there.
The World Economic Forum said that while top economists expect “the monetary policy stance to remain steady in most parts of the world in 2023,” 59% of Europe expected it to see a tightening. As expected by the majority, 55%, for the United States
The US Federal Reserve has raised interest rates several times in 2022, including four consecutive hikes of 75 basis points, and most recently a hike of 50 basis points, as previously reported by FOX Business.
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For this year, 68% of senior economists said they “agree” or “strongly agree” that the cost of living crisis “will be less severe at the end of the year than it was at the beginning,” according to the survey. They were also optimistic about the energy crisis this year, with 64% of them indicating that they think it is likely to become less severe.
Prospects were even more divided for the labor markets. The survey found that about 41% of the senior economists surveyed expected they would remain tight, while the same percentage indicated they would not.
The World Economic Forum released the survey results on the same day as the annual meeting of heads of state and business leaders in Davos, Switzerland.
The survey was conducted between November and December last year and included responses from 22 members of its community of senior economists.