Many leading economists offered a bleak outlook on whether the global economy will enter a recession in 2023, according to a survey released Monday by the World Economic Forum (WEF).
In the WEF’s Chief Economist Outlook survey, 63% of chief economists surveyed said they expect the global economy to experience a recession this year. Of that figure, 45% said one was “somewhat likely” and 18% said it was “extremely likely.”
BLACKROCK CEO Larry Fink assesses the possibility of a recession.
The share of chief economists who rated the likelihood of a global recession as “extremely likely” more than doubled compared to September, according to the WEF.
32 percent said one was “extremely” or “somewhat” unlikely.
Economic growth forecasts vary by region, the study found.
Chief economists polled are the most pessimistic about Europe, with 68% predicting “very weak” growth and 32% “weak”. For the US, 82% predicted “weak” growth, with 9% predicting “very weak” and “moderate” growth, respectively, according to the survey.
The two regions of South Asia and the Middle East and North Africa (MENA) saw the most positive economic growth expectations. About 70% of chief economists expected moderate or strong growth in the MENA region, while 85% said the same about South Asia.
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The Chief Economists Outlook survey also asked chief economists to weigh in on what inflation would look like in different regions.
More than three-quarters said they expect US inflation to moderate in 2023, while 24% said it would be high. In Europe, 43% predicted moderate and 57% high inflation.
Top economists also expected inflation to moderate at 55%, or as high as 45%, in Latin America and the Caribbean. Many predicted moderate inflation for other marzes as well.
Meanwhile, China was forecast to have “very low” inflation in 2023 by 48% of leading economists. The same proportion said they had moderate inflation expectations there.
While leading economists “expect the stance of monetary policy to remain unchanged in most parts of the world in 2023”, 59% forecast that Europe will experience a tightening, the WEF said. A majority, 55%, also expected this for the US
The U.S. Federal Reserve has raised interest rates several times in 2022, including four 75-basis-point hikes and most recently a 50-basis point increase, as FOX Business previously reported.
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For this year, 68% of chief economists said they “agree” or “strongly agree” that the cost-of-living crisis will be “less severe at the end of the year than at the beginning,” according to the survey. They also expressed optimism about this year’s energy crisis, with 64% saying they thought it was likely to become less severe.
Forecasts for the labor market were more divided. About 41% of chief economists surveyed predicted they would remain tight, while the same percentage suggested they would not, the survey found.
The WEF released the survey results on the same day as the annual meeting of heads of state and business leaders kicked off in Davos, Switzerland.
The survey was conducted between November and December of last year and included responses from 22 members of its community of chief economists.