According to the Centre for Economics and Business Research (CEBR), the world faces a recession in 2023. Higher borrowing costs, which are intended to tackle inflation, will cause a number of economies to shrink.
CEBR, one of the UK’s leading economics consultancies, mentioned in its latest reports that as predicted 12 months ago, world GDP in USD rose above $100 trillion for the first time ever in 2022. Further, it is projected to reach $207 trillion by the end of our forecast horizon in 2037.
CEBR reports further mentioned that in its annual World Economic League Table (WELT), the global economy surpassed $100 trillion for the first time in 2022. However, the report by the British consultancy stated that the world will stall in 2023 as policymakers continue their fight against soaring prices.
Kay Daniel Neufeld, director and head of Forecasting at CEBR, said, “It’s likely that the world economy will face recession next year as a result of the rises in interest rates in response to higher inflation.”
Last year, the report predicted that struck more or less an optimistic tone as the vaccination campaign against COVID-19 was underway globally. It was expected that there will be normal levels of economic activity despite the Omicron wave and easing lockdown restrictions.
The report mentioned that Russia’s invasion of Ukraine in February led to massive economic, food, and fuel crises, eventually rising in price globally.
WATCH | World economy is headed for a recession in 2023
CEBR report noted, “Inflation has become the main economic story of the past year and even though we are starting to see price growth decelerating in some economies, volatility in global energy markets and entrenched core inflation suggest that it will remain front and centre in 2023 as well.”
The report added, “The battle against inflation is not won yet. We expect central bankers to stick to their guns in 2023 despite the economic costs. The cost of bringing inflation down to more comfortable levels is a poorer growth outlook for a number of years to come.”
As per the report, China is now not set to overtake the US as the world’s largest economy until 2036 at the earliest, which is six years later than expected.
The report also mentioned that it is predicted that India will become the third $10 trillion economy in 2035 and the world’s third-largest by 2032.
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