The outlook for the global economy has “darkened” and the world is at a point of “significant economic danger”, according to the World Economic Forum’s Chief Economists Outlook survey.
The survey report cites a World Bank prediction that 2022 will be one of the worst years for global poverty since the turn of the century - second only to 2020, which was spent in the grip of the coronavirus pandemic.
COVID-19 continues to impact economies’ growth and the war in Ukraine is causing significant global economic disruption, fuelling stubbornly high inflation.
Fears of a global recession grow
Expectations for economic growth have been scaled back across the world, with 64% of respondents considering a global recession to be at least “somewhat likely”, the report says.
Almost 90% of those surveyed expect growth in Europe to be either weak or very weak, due to the war in Ukraine, high inflation and threats to energy supplies. And growth projections are expected to be worse next year, across the continent.
In 2022, weak or very weak growth in China is expected by 67% of those surveyed, with COVID-19 restrictions and concerns about its real-estate sector weighing this down. However, more respondents expect its economy to pick up in 2023, with 66% anticipating moderate or strong growth.
Although almost 65% of those surveyed expect moderate growth or better in the US in 2022, optimistic projections drop to 37% when it comes to 2023. The likelihood of ongoing monetary tightening is considered to be a key factor in this.
Four in 10 economists expect growth to be weak in Central Asia in 2023, twice as many as in 2022. While in sub-Saharan Africa, 43% are predicting weak growth in 2022, with a much higher 60% of respondents predicting the same for 2023.
However, the picture is looking less grim in other parts of the world. The report says 71% expect growth in the Middle East and North Africa (MENA) region to be moderate or better. This is reflected in a strong year enjoyed by the region’s energy exporters.
In South Asia, the vast majority of economists expect moderate growth in both 2022 and 2023. More people expect moderate growth in Latin America’s next year than they do for the rest of 2022 - 56% (rising from 50%).
Source: World Economic Forum
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