outlook for the world economy in 2023 looks “bleak” Through the eyes of the world’s leading economists gathered this week at the World Economic Forum (WEF) in Davos.
Outlook is for a year of weak growth and with a quite likely recessionAccording to the Perspectives report for January 2023, published today during the opening day of the forum, coinciding with its annual meeting in Davos, Switzerland, from today to January 20.
“While there are some reasons for optimism, such as easing inflation pressures, several aspects of our forecasts remain gloomy,” the report said, “due to continuing economic uncertainty and political challenges of historic proportions.”
Nearly two-thirds of the 22 chief economists surveyed by the WEF said they believed a global recession was likely in 2023, with 18% of them considering it “extremely likely”. The profiles surveyed are part of the global economic and financial elite, and come from Giants like UBS, Google, Microsoft and Bank of America
“Global growth prospects remain anemic and The risk of a global recession is high“, notes the report, although they expect to see major regional changes in economic growth next year.
All economists agree that they expect to see weak or very weak growth in Europe, while 91% said the same for the United States. In addition, more than half of those surveyed expect inflation to remain high in Europe, while only 5% expect to see it in China.
According to the report, these differences are a reflection of higher energy prices, rising interest rates and weak demand in Europe. In contrast, ending China’s zero COVID policies could boost the country’s economy, although production could be cut if more people become infected with the virus.
Outlook looks dark. companies like Amazon, Goldman Sachs and Salesforce They’ve already announced layoffs this yearAnd leading economists expect such job cuts to continue:
86% of those surveyed expect multinational companies to reduce operating expenses, and 78% expect more workers to be laid off. Also, most economists said they expect companies to continue passing on the increased costs to customers.
But even though the outlook is largely pessimistic, the report highlights how some of the major concerns in the global economy today could lead to weakening over the course of the year.
Two-thirds of those surveyed believe the purchasing power crisis will be less severe by the end of 2023, while close to two-thirds are optimistic the energy crisis will improve by the end of this year.
However, JPMorgan CEO Jamie Dimon predicted in December that Europe’s energy crisis will worsen and will probably last for years.