global recession alert

Gas shock in Europe, very sharp rise in interest rates in the United Statesendless lockdowns and a serious real estate crisis in China… One by one, the major drivers of the global economy are stalling, or even going into the red. “The clouds of recession are gathering across the world”warns Seth Carpenter, the chief economist of Morgan Stanley, an American bank. “For consumers, a long and cold winter is looming”adds Tamara Basic Vasiljev, of Oxford Economics.

A worrying consensus is emerging among economists: the euro zone will be in recession by the end of the year; the United States could perhaps avoid it, but they will not escape a serious brake; as for China, engine of the world economy for a quarter of a century, its growth has never been so precarious.

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We must add the United Kingdom, probably already in recession, Central Europe, hit hard by the war in Ukraine, or even a plethora of emerging countries which are going through a serious crisis: Lebanon, Sri Lanka, Pakistan in near bankruptcy, Turkey swept away by galloping inflation (80%).

However, this is not a doomsday scenario. “We are not on the eve of a major crisis like that of 2008, tempers Alejandra Grindal, of Ned Davis Research. But we are indeed heading towards a global recession. » The Swiss bank UBS predicts the same for the European monetary union a recession ” a little deep “.

The year 2022 had however started in a rare surge of optimism. The pandemic seemed to be over, while households had not suffered too much thanks to unprecedented support from governments. There was indeed the beginning of a surge in inflation, but the majority opinion was that the phenomenon mainly concerned the United States and was transitory.

This rosy scenario has completely gone off the rails, for two reasons. First, the West is experiencing its worst surge in inflation for forty years, caused first by the economic disruptions that followed the pandemic – disorganized supply chains, tight labor market –, then by the war in Ukraine. Then, China continues to impose a particularly inflexible zero Covid policy.

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The constantly revised downward forecasts of the International Monetary Fund (IMF) tell of this slow disenchantment. In October 2021, it predicted global growth of 4.9% for the year 2022; in April, it lowered it to 3.6%; in July, at 3.2%. A level still considered far too optimistic by many economists: Morgan Stanley for its part expects 2.5%, while Oddo BHF forecasts 2.8%.

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