The outlook for the global economy in 2023 is “bleak”, the World Economic Forum has said. A survey of economists released on the opening day of Davos shows heightened fears of a global recession. Economists, from giants like Google and Deutsche Bank, said Europe and the United States would be hit hardest. Something is loading.
Thank you for your registration!
Access your favorite topics in a personalized feed on the go. download app
Top economists’ outlook for the global economy for 2023 is “gloomy”, with weak growth expectations and a probable recession, according to a World Economic Forum report released on the opening day of Davos.
The World Economic Forum has summarized the thoughts of some top economists in its January 2023 Chief Economists Outlook, released to coincide with the group’s annual meeting in Davos, Switzerland, which began on Monday.
“While there are grounds for optimism, such as easing inflationary pressures, many aspects of the outlook remain bleak,” the report said, citing “continued economic uncertainty and policy challenges of historic proportions.”
Almost two-thirds of 22 chief economists polled by the WEF said they thought a global recession was likely in 2023, with 18% considering it “extremely likely”.
“Global growth prospects remain anemic and the risk of a global recession high,” the report said.
But the respondents – who came from finance and business giants like UBS, Google, Microsoft and Bank of America – expect to see huge regional shifts in economic growth over the next year.
All economists said they expected weak or very weak growth in Europe and 91% said they expected it in the United States, while that figure was less than half for the Middle East. Orient, North Africa, South Asia, China and East Asia and the Pacific. More than half of respondents said they expected high inflation in Europe, compared to just 5% who expected to see it in China.
The WEF said this likely reflected high energy prices in Europe, interest rate hikes and “sluggish demand”. By contrast, the gradual reversal of China’s zero-COVID policies could boost the country’s economy, although it could slow production if more people are infected with the virus.
Companies such as Amazon, Goldman Sachs and Salesforce have already announced layoffs this year, and chief economists expect job cuts like these to continue. 86% of respondents said they expect multinational companies to cut operating expenses, with 78% expecting workers to be laid off. Most economists said they expected companies to pass on higher costs to customers as well.
But despite the largely pessimistic outlook, the report highlighted how some of the prevailing concerns in the global economy could currently weaken over the course of the year.
Two-thirds of respondents said they expect the cost-of-living crisis to ease by the end of 2023, while almost two-thirds said they were optimistic that the economic crisis will abate. Energy will have started to improve by the end of the year. year. JPMorgan CEO Jamie Dimon, however, predicted in December that Europe’s energy crisis would worsen and likely last for years.