Global Economy Headed Towards A Recession In 2023, British Economists Predict
A report issued by the Centre for Economics and Business Research (CEBR) predicts that the world is heading toward a recession in 2023.
Whether it’s a long or short one, severe or not, is up for debate but the general consensus is that it will happen.
“It’s likely that the world economy will face a 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, one of the UK’s leading economic consultancies.
The CEBR gathers its data from the International Monetary Fund (IMF) World Economic Outlook and utilises an internal model to predict growth, inflation, and exchange rates.
A global increase in prices due to specific geo-political issues such as the war in Ukraine has already negatively affected the world economy.
The US, UK, China, Japan, and Germany have the largest economies, and any downturns – due to high inflation, geopolitical issues, climate change, and low economic growth – in these countries can potentially affect everywhere else.
What does this mean for Malta?
”The biggest risks to Malta’s economic growth for 2023 are a decline in global economic activity which would drive local exports down. Consistently high inflation risks also cause a decrease in both corporate investment and consumer demand. However, these risks may be mitigated by rising wages which may steady local household consumption,” writes Arnas Lasys in BusinessNow.
However, Lasys writes that Malta’s economy is steady and set to grow in the next year.
”Malta’s economy is set to grow 3.7 percent in 2023, a downward revision of 0.8 percent due to a faster-than-expected economic recovery in 2022. As a result, Malta is expected to avoid a recession, with wages set to increase and unemployment set to decline further to three percent.”
However, inflation is set to persist for the upcoming year.
What do you make of this?
READ NEXT: Almost 2,000 Maltese Driving Licenses Revoked In 2022
