The World Economy is headed for Recession. But the Inflation Fight is Not Over Yet: Research

The global economy is heading towards a recession It tries to cope with the pressures inflationAccording to Centre for Economics and Business Research (CEBR), China will overtake the United States economically by 2036,

“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,” Kay Daniel Neufeld, Director and Head of Forecasting at CEBR said Bloomberg. According to the World Economic League Table 2023 a CEBR Report (pdf(published this month) The global economy was hit by an unprecedented inflationary shock in 2022.

“The question for the year ahead is how painful measures to rein in inflation will be for the world economy and if any potential economic contractions can be kept short and shallow or whether a more prolonged reduction in demand will be required to get price growth back to more comfortable levels,” The report stated.

The central banks of England, the United States and Europe have all reiterated their commitment to fighting inflation “is not won yet” The interest rates must rise even more in the next year.

Inflationary pressures are confirmed by the fact that core inflation rates are many times higher than the targets set out by central banks. “have indeed become more entrenched.” This could result in inflation expectations being raised. “unanchored.”

“We expect 2023 to be a challenging year for markets and downside risks are prevalent in the housing market, where higher borrowing costs are compounded by falling real incomes and an anticipated uptick in unemployment over the year,” The report stated.

China, United States

Concerning the United States, this report points out how the Federal Reserve tried to engineer a “soft landing” This year’s economy. However,

*As an Amazon Associate I earn from qualifying purchases