World Economic Forum Chief Economists Predict Global Recession In 2023

A majority of the World Economic Forum’s Community of Chief Economists expect a global recession in 2023, a survey report published on the website of the WEF and released on the first day of WEF meeting in Davis has shown.

They also see geopolitical tensions continuing to shape the global economy, and anticipate further monetary tightening in the United States and Europe.

The Chief Economists Outlook, indicated that almost two-thirds of chief economists believe a global recession is likely in 2023; of which 18% consider it extremely likely – more than twice as many as in the previous survey conducted in September 2022.

“A third of respondents consider a global recession to be unlikely this year.”

According to the report, there is a strong consensus that the prospects for growth in 2023 are bleak, especially in Europe and the US.

“All of the chief economists surveyed expect weak or very weak growth in 2023 in Europe, while 91% expect weak or very weak growth in the US. This marks a deterioration in recent months (at the time of the last survey, the corresponding figures were 86% for Europe and 64% for the US).

In China, expectations of growth are polarized, with respondents almost evenly split between those who expect weak or strong growth. Recent moves to unwind the country’s highly restrictive zero-COVID policy are expected to deliver a boost to growth, but it remains to be seen how disruptive the policy shift will be, particularly in terms of its health impacts,” it stated.

Inflation

On inflation, the statement said the chief economists see significant variation across regions, with the proportion expecting high inflation in 2023, ranging from just 5% for China to 57% for Europe.

“Following a year of sharp and coordinated central bank tightening, the chief economists said they expect the monetary policy stance to remain constant in most of the world this year. However, a majority expect further tightening in Europe and the US (59% and 55%, respectively). They noted that 2023 is likely to involve a difficult balancing act for policy-makers between tightening too much or too little.”