Germany, the world’s fourth-largest and Europe’s largest economy, has become the first major economy to enter recession. However, a large number of people across the world already feel their economy is in a state of recession.
A 29-nation survey by polling agency Ipsos has found that the fears about recession are far more widespread than actual recession. In reality, only Germany and Hungary have announced that they have entered recession.
An country is said to be in recession when its economy contracts for two consecutive quarters.
More than half the people surveyed in 26 countries felt their country was in recession, a report in Financial Times said. Only a quarter of the people surveyed in these countries felt their country was safe from a recession, the report added.
About 80% of people surveyed in South Korea were convinced that their country was in recession, even though the country averted recession in the first three months of 2023.
In the United Kingdom, 46% of those surveyed felt their country was in recession. The economy instead grew by 0.1 percent in the first three months of 2023.
Only in The Netherlands, Australia and Singapore, more people felt that their economy was holding up well against the threat of recession.
The Ipsos survey noted that Inflation continues to remain a significant concern, with at least 63 percent across the 29 countries expecting it to rise over the coming year.
“Most expect that inflation won’t return to what they consider to be normal levels for at least a year. Forty-six percent say it will be at least 12 months before inflation returns to normal,” the survey noted.
Bleak outlook for global economy
While the global economic outlook remains bleak for 2023, the International Monetary Fund has said that most economies will avert a recession this year, despite economic and geopolitical concerns.
“The global economy is recovering from the shocks of the last few years, and particularly of course the pandemic, but also the Russian invasion of Ukraine,” IMF chief economist Pierre-Olivier Gourinchas said in a press briefing in April 2023.
It has said that the world economy is expected to grow by 2.8 per cent this year. Around 90 per cent of advanced economies are likely to experience slowing growth this year, the IMF added.
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