A global recession is likely to hit in 2023 as increased borrowing costs taken to combat inflation lead to the contraction of several economies, said the Centre for Economics and Business Research (CEBR).
A British firm released its annual World Economic League Table, which showed that while the global economy topped US$100 trillion for the first time in 2022, growth would slow in 2023 as governments continued their fight against rising prices.
“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,” said Kay Daniel Neufeld, director and head of Forecasting at CEBR.
The report also stated that “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.”
In contrast to the IMF’s recent forecast, the reports are more pessimistic. In October, the organization warned that the world economy as a whole would decline by more than a third and that the world’s GDP would increase by less than 2% in 2023, defining a global recession.