CEBR analysts warned of the risk of a global recession in 2023

In 2023, the world will face a recession, according to experts from the British Center for Economic and Business Research (CEBR). This will lead to the desire of world regulators to stop inflation,

In 2023, the world will face a recession, according to experts from the Center for Economic and Business Research (CEBR). Their forecast for the next year is published on the organization's website (.pdf).

“It is likely that the global economy will face a recession next year as a result of higher interest rates in response to higher inflation,” Kay Daniel Neufeld, DIRECTOR and HEAD of forecasting at CEBR, told BLOOMBERG.

In 2022, the global economy experienced an inflationary shock on a scale not seen since the early 1970s, CEBR authors say. Supply chain disruptions caused by the covid-19 epidemic and changing consumer demand patterns in 2021 led to problems, to which 2022 added rising energy prices due to sanctions against RUSSIA. The effects of this shock are felt all over the world, but especially the rise in energy prices has affected the European economies.

"Crack in the financial system":how big are the risks of a global recession Pro

The US Federal Reserve System (FRS) , the Bank of England and
the European Central Bank have raised interest rates and will raise them next year, as "the battle against inflation is not yet won."

“We expect central banks to hold on to their guns in 2023 despite the economic cost. This will inevitably lead to a significant correction in asset prices,” the report says. And higher borrowing costs, designed to reduce inflation, will cause a slowdown in the economies of a number of countries.

“2023 will be a challenging year for the markets, especially in the real estate market, where the high cost of loans is exacerbated by falling real incomes and an expected surge in unemployment during the year,” CEBR analysts said in a forecast.

What do the results of the December meetings of the world's key central banks tell investors Opinion

Read on RBC Pro Meta * in the register of extremist organizations: how companies should respond Office syndrome: how gadgets destroy the body and how to fix itwith what questions companies go to lawyers

How the global crisis will affect Russia

The Russian economy will decline by the end of the year, although the strengthening of the ruble in the short term led to the fact that at the end of the year the country rose two points in the 2022 CEBR ranking of world economies - from 11th to ninth place. However, Russia's economic growth prospects have deteriorated significantly since the start of the special operation in Ukraine, and CEBR expects the ruble to depreciate against the DOLLAR in the coming years.

The impact of the sanctions on the Russian economy has been mixed so far, as rising commodity prices have in some cases more than offset the impact of reduced trade on the country's income, CEBR points out. “Nonetheless, sanctions on technology imports to Russia are limiting domestic production and spurring inflation, which stood at 12.6% in October 2022 compared to a high of 17.8% in April,” analysts say. Thanks to oil and gas EXPORT revenues, Russia's public finances are strong so far.

“We expect the Russian economy to contract by 5% in 2022, followed by a further 2.8% decline in output in 2023 and growth in 2024. Over the next decade, the economy will grow at an average rate of 1.3% each year, CEBR predicts. From 2022 to 2037, Russia will drop from ninth place in the organization's ranking of world economies to 14th.