Newsnomics AJAY ANGELINA reporter | The International Monetary Fund (IMF) pessimistic findings says that a third of the world economy will contract and there is a 25 per cent chance of global GDP growing by less than 2 per cent in 2023, which it defines as a global recession.
The global economy surpassed $100 trillion for the first time in 2022 but will stall in 2023 as policy makers continue their fight against soaring prices, the British consultancy said in its annual World Economic League Table.
“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,” said Kay Daniel Neufeld, director and head of Forecasting at CEBR.
“There would almost certainly be quite a sharp world recession and a resurgence of inflation, because of the economic warfare between China and the West would be several times more severe following Russia’s attack on Ukraine.,” CEBR said.
According to the Centre for Economics and Business Research, “the world faces a recession in 2023 higher borrowing costs aimed at tackling inflation cause a number of economies to contract.”
There are some predictions that:
1. China is in great damage because of its Zero-Covid policy, and slow trade tensions with west is now not set to overtake the US as the world’s largest economy until 2036.
2. India will become the third $10 trillion economy in 2035 and the world’s third largest by 2032.
3. Britain is no longer set to grow faster due to “an absence of growth-oriented policies and the lack of a clear vision of its role outside of the European Union.” Whereas the UK remain the world’s sixth largest economy, and France seventh, over the next 15 years.
4. Emerging economies with natural resources will get a “substantial boost” as fossil fuels play an important part in the switch to renewable energy.
5. The global economy is a long way from the $80,000 per capita GDP level at which carbon emissions decouple from growth, which means further policy interventions are needed to hit the target of limiting global warming to just 1.5 degrees above pre-industrial levels.
