The World Bank reported that the global recession risk will increase in 2023 as central banks simultaneously raise interest rates against high inflation.
From the Bank, “Is a Global Recession Near?” Central banks around the world have raised interest rates this year simultaneously, in a manner not seen in the last 50 years.
Pointing out that this trend is likely to continue next year, it was stated in the statement that the currently expected interest rate increases and other policy actions might not be enough to bring global inflation back to pre-pandemic levels.
“As central banks around the world simultaneously raise interest rates in response to inflation, the world may be heading towards a global recession in 2023 and a series of financial crises that will permanently damage emerging and developing economies,” the statement said. An evaluation was made.
The world’s three largest economies are slowing sharply.
Noting that core inflation could reach 5 percent in 2023 unless supply cuts and labor market pressures subside, further rate hikes and financial market stress may slow global gross domestic product (GDP) growth to 0.5 percent in 2023. It was recorded that this is equivalent to a contraction of 0.4 percent per capita.
The statement stated that central banks might need to increase interest rates by another two percentage points to reduce global inflation to a rate compatible with the targets.
