The world economy on the brink of recession in the face of many headwinds | Bot To News


Chief Economist of Atradius, John Loriéassesses the economic landscape at this challenging time for the global economy.

AMSTERDAM, December 13, 2022 /PRNewswire/ — The global economy is facing an unprecedented mix of challenges and a sharp deterioration in growth. After 2023, the picture is slightly better, as we expect current central bank measures and normalization of supply chains to help ease price pressures.

In this edition of the Atradius Economic Outlook, we look at the economic challenges facing the world’s regions. High inflation is a major challenge affecting the entire world. The shadow of high inflation and economic stagnation, stagflation, hangs low over many economies as a cost-of-living crisis unfolds, complicated by volatile food and energy prices, war in Ukraine, the ongoing effects of the pandemic, high inflation and low growth. Global GDP growth is expected to slow to 1.2% in 2023 from 2.9% in 2022.

Stagflation is expected to gradually ease in 2023 as consumer inflation declines. Global growth is expected to pick up again by 2.9% in 2024, especially if the negative effects of the war in Ukraine begin to yield.

2023 is likely to be a difficult year for both emerging markets and developed economies. We expect emerging market GDP growth to slow to 2.9% in 2023 from 3.6% in 2022. For those with high private or sovereign debt, interest rates will pose additional challenges. Many developed markets are also facing a slowdown in growth next year, with forecasts of -0.1% for the Eurozone and a 0.4% contraction for the US.

An unusual degree of uncertainty surrounds our forecast. A major risk is the persistence of high inflation, driven by new energy price shocks and the spiral between wages and prices. This would encourage central banks to take more drastic measures to reduce inflation, which would have a severe impact on growth. Indeed, under this scenario, global GDP growth would halve to 0.6% in 2023.

Additional details on the state of the global economy can be found in December 2022 published by Atradius Economic Outlook. This is available for free download at https://group.atradius.com/publications/

About Atradius

Atradius is a global provider of credit insurance, bonds and guarantees, collections and information services, with a strategic presence in more than 50 countries. The products offered by Atradius protect companies worldwide from the risk of default associated with the sale of goods and services on credit. Atradius is a member of Grupo Catalana Occidente (GCO.MC), one of the largest insurance companies in Spain and one of the largest credit insurance companies in the world. More information can be found on the website https://group.atradius.com

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