World economy is headed for a recession in 2023, says CEBR

The Centre for Economics and Business Research (CEBR) has revealed that the world is headed for a recession in 2023. The world faces a recession in 2023, said research. The recession could be caused by the rise in interest rates in response to higher inflation. A number of economies have started a contract due to fresh borrowing costs aimed at tackling inflation.

The world economy surpassed $100 trillion for the first time in 2022 but it will stop making progress in 2023 as a result of policymakers continuing their fight against soaring prices, said British consultancy in its yearly World Economic League Table.

Kay Daniel Neufeld, director and head of Forecasting at CEBR, said that “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.”

The report also added that the world is yet to win the battle against inflation. The central bankers are expected 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,” the report added.

The research results are more depressing than the recent forecast from the International Monetary Fund, which warned in October that more than a third of the world economy will contract and there is a 25% chance of global GDP growing by less than 2% in 2023, which indicates as a global recession.

The developing economies will catch up with the richer ones by 2037 and the world gross domestic product will have doubled. The world will see a shifting in the balance of power as East Asia and Pacific region account for over a third of global output by 2037, while Europe’s share will reportedly shrinks to less than a fifth.

The Centre for Economics and Business Research takes its base data from the IMF’s World Economic Outlook. It uses an internal model to predict growth, inflation and exchange rates.

As per the research, India is predicted to become the third $10 trillion economy in 2035 and the world’s third largest by 2032.

(Source: Bloomberg)