Nearly two-thirds of leading world economists said that a global recession is likely this year and there is near unanimity that there will be weak economic growth in the U.S. and Europe, according to a new survey.
The World Economic Forum’s Chief Economists Outlook echoes expert opinions that a recession could be nearing in 2023, as major economies attempt to quell inflation.
On inflation, though, the 22 world economists are a bit more optimistic. Just 24 percent of those surveyed expect high inflation in the U.S., while 57 percent say it is likely in Europe. Just 5 percent of economists polled expect high inflation in China.
As the Federal Reserve has taken steps in recent months to fight inflation by raising interest rates, a majority of world economists in the new survey said that a further tightening of monetary policy in the U.S. and Europe is on the table for the next year.
Recent numbers out of the Labor Department showed that inflation has continued to slow in the U.S. Now eyes are on the Fed, which will decide whether to take a more aggressive approach in raising interest rates or hand down a more tepid increase in meetings at the end of the month.
And as they expect a drawback in economic activity, almost all of the economists predict that multinational companies will take steps to cut costs this year, with 78 percent expecting worker layoffs.
All of the economists also said that geopolitical events, such as the Ukrainian war, will continue to shape economic trends around the world.
But they added there is reason for optimism in the cost-of-living crisis that has plagued many countries. Nearly 70 percent of those surveyed said they think the crisis may be close to its peak, predicting it could become less severe by the end of the year.
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