World Recession in 2023 is Inevitable, says First American News

World Recession in 2023 is Inevitable, says First American News by FirstAmericanNews

In 2023 the global economy is facing a recession, according to the Center for Business and Economic Research, higher borrowing costs aimed at tackling inflation cause several economies to contract.

In 2022, the world economy surpassed $100 trillion for the first time, but it will stagnate in 2023 as policymakers continue their fight against rising prices.

Kay Daniel Neufeld, Director and Head of Forecasting at CEBR said that “The world economy is likely to face a recession next year as a result of interest rate increases in response to higher inflation.”

“The battle against inflation is not yet won. We expect central bankers to hold their ground in 2023 despite the economic costs. The cost of reducing inflation to more comfortable levels is a poorer growth outlook for several years to come. He adds the report.

The International Monetary Fund warned that more than a third of the world economy will contract and there is a 25% chance that world GDP will grow less than 2% in 2023, which it defines as a global recession.

World Central Banks See More Recession in 2023 According to WSJ Renewal

World gross domestic product will have doubled by 2037, as developing economies catch up with richer ones. The shifting balance of power will see the East Asia and Pacific region account for more than a third of global output by 2037, while Europe’s share will drop to less than a fifth.

CEBR uses an internal model to forecast growth, inflation and exchange rates, taking its base data from the IMF’s World Economic Outlook

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China’s expansion has slowed, all due to China’s zero Covid policy and rising trade tensions with the West. China is now not ready to overtake the US as the world’s largest economy until 2036 at the earliest, six years later than expected.

The shift to being the largest economy for China was expected in 2028, delaying last year to 2030. But now it is believed to be as late as 2036, and may come even later if Beijing attempts to seize control of Taiwan and faces retaliatory trade sanctions. .

The CEBR said that “The consequences of the economic war between China and the West would be several times more serious than what we have seen after Russia’s attack on Ukraine. There will almost certainly be a fairly sharp global recession and a resurgence of inflation.”

“The damage to China would be many times greater and this could well affect any attempt to lead the world economy.”

These are some of the predictions:

  • India will become the third $10 trillion economy in 2035 and the world’s third largest by 2032
  • The UK will remain the world’s sixth largest economy, and France seventh, over the next 15 years but Britain is no longer set to grow faster than European peers due to “an absence of growth oriented policies and the lack of a clear vision of its role outside of the European Union.”
  • Emerging economies with natural resources will get a “substantial boost” as fossil fuels play an important part in the switch to renewable energy
  • The global economy is a long way from the $80,000 per capita GDP level at which carbon emissions decouple from growth, which means further policy interventions are needed to hit the target of limiting global warming to just 1.5 degrees above pre-industrial levels.
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