According to research, the world economy is facing the threat of recession in 2023. Inflation is projected to continue to be a threat in 2023. This can cause high interest rates to hurt economies.
The world is at risk of a recession in 2023, according to the Center for Economics and Business Studies (CEBR), a UK-based global consultancy. Higher borrowing costs due to the fight against inflation may cause some economies to contract.
CEBR announced in its annual World Economic League Table that the global economy surpassed $100 trillion in 2022 for the first time. The Center said that the economy will hit the brakes in 2023 as policy makers continue their fight against inflation.
“The fight against inflation has not yet been won. Despite the economic costs, we expect central banks to take up arms in 2023. The cost of reducing inflation is a weaker growth outlook for the next few years.
CBDR findings have been more pessimistic than the International Monetary Fund’s (IMF) latest forecast. In October, the IMF predicted that more than one-third of the world’s countries will shrink. The IMF announced that it is likely that the global growth will be less than 2 percent in 2023, which it defines as the year of global recession.
“The world economy is likely to face recession next year as a result of rate hikes in response to high inflation,” said CEBR Director Kay Daniel Neufeld.
The report also included various assessments on the Chinese economy. It was stated that the trade war between the West and China and the Covid zero policy slowed down the Chinese economy.
The agency predicted that China would become the world’s largest economy by 2036, surpassing the United States. The previous forecast was 2030.
However, this forecast was also delayed as China’s zero Covid policy and rising trade tensions with the west slowed China’s growth.
On the other hand, the report predicted that India will become the world’s third largest economy by 2032. It was also stated that the United Kingdom will continue to be the sixth largest economy in the world in the next 15 years, while France will continue to be the seventh largest economy.