Davos: Chief economists believe global recession likely in 2023

Davos: Chief economists believe global recession likely in 2023

DAVOS, Switzerland – Nearly two-thirds of the chief economists surveyed by the World Economic Forum (WEF) forecast a global recession in 2023, despite being optimistic about inflation and strong balance sheets.

There is a strong consensus that the prospects for growth this year are bleak, especially in Europe and the US, said the report released by the WEF.

All of the chief economists surveyed predicted weak or very weak growth in 2023 in Europe, while 91 percent expect weak or very weak growth in the US.

“In China, expectations of growth are polarized, with respondents almost evenly split between those who expect weak or strong growth,” it said.

“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 added.

On inflation, the chief economists see remarkable changes across regions, with most of them expecting high inflation in 2023, ranging from just 5 percent for China to 57 percent for Europe.

They also expect the tight monetary policy stance to remain constant in most of the world this year.

“With two-thirds of chief economists expecting a worldwide recession in 2023, the global economy is in a precarious position. The current high inflation, low growth, high debt and high fragmentation environment reduces incentives for the investments needed to get back to growth and raise living standards for the world’s most vulnerable,” said Saadia Zahidi, Managing Director at the WEF.

“Leaders must look beyond today’s crises to invest in food and energy innovation, education and skills development, and in job-creating, high-potential markets of tomorrow. There is no time to lose,” she added.

Davos summit

Under the theme “Cooperation in a Fragmented World”, top figures shaping global politics and the business world will attend this week’s 53rd annual meeting of the WEF in Davos-Klosters, Switzerland.

The meeting, which started Monday, will bring together more than 2,700 leaders from 130 countries, including 50 heads of state or government, as multiple crises deepen divisions and fragment the geopolitical landscape.

This year will also see the highest-ever business participation in Davos, with more than 370 public figures from governments and international organizations and over 1,500 business leaders and 90 innovators.

The meeting will also see the attendance of 56 finance ministers, 19 central bank heads, 30 trade ministers and 35 foreign ministers.

Among the top political leaders attending the summit are German Chancellor Olaf Scholz, European Commission President Ursula von der Leyen, European Parliament President Roberta Metsola, Finnish Prime Minister Sanna Marin, Serbian President Aleksandar Vucic, Greek Prime Minister Kyriakos Mitsotakis and Azerbaijani President Ilham Aliyev.

The heads of Spain, the Philippines, South Africa and South Korea will also appear at the Swiss ski resort.

US Climate Envoy John Kerry, NATO Secretary General Jens Stoltenberg, European Central Bank head Christine Lagarde, UN Secretary-General Antonio Guterres, International Monetary Fund Managing Director Kristalina Georgieva and the executive director of the International Energy Agency, Fatih Birol, will also take part in the event. (Anadolu)

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