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As the world frets over recession worries, the global economy is expected to grow 2.7 percent in 2022 and growth is expected to slow to 2.3 percent in 2023, Moody’s latest report said on Monday.
As the world frets over recession worries, the global economy is expected to grow 2.7 percent in 2022 and growth is expected to slow to 2.3 percent in 2023, Moody’s latest report said on Monday.
Moody’s has cut global real GDP forecast to 2.7 percent in 2022 (September baseline) from 4.2 percent in its January forecast. For 2023, the GDP forecast was revised downwards from 3.6 percent to 2.3 percent.
“Although we expect the global economy to grow in 2022, any policy missteps or additional risks would raise the risk of a global recession over the next 12 months, above our current assessment of just above break even,” financial services firm Moody’s Analytics said in his report entitled “Global Outlook: Global Economy on Edge”.
It found business sentiment remains subdued and consistent with a global economy just avoiding a recession. According to the research firm, the global environment is more vulnerable as record-high inflation continues to gain momentum and growth slows. It added that risks of stagflation had increased around the world but it would take months for a stagflationary environment to materialize.
Global consumer price inflation gained momentum in August, fueled by surging price increases in most major countries.
According to Moody’s report, price growth accelerated to 11.9 percent year-on-year, the 12th consecutive rise and the highest rate since January 1981. The inflationary environment continues to be driven by two powerful waves of negative supply shocks, it said.
“Even as the global economy continued to work through cost increases from widespread factory and retail shutdowns early in the COVID-19 pandemic, the Russian invasion of Ukraine exacerbated existing cost-driving inflation and growth risks. Inflation, which began to rise above the 2 percent target set by central banks in March 2021, accelerated sharply around the world following the February invasion, particularly in the food and energy categories,” the report said.
(Edited by : Kanishka Sarkar)
