Citi warns 'rolling recessions' will shake global economy in 2023
Wed, November 30, 2022 at 7:21 AM·3 min read
The global economic outlook for 2023 is murky at best, economists at Citi warn.
"As we survey the prospects for the global economy, we see many reasons for concern, including continued challenges from the pandemic and the Russia-Ukraine war, high inflation, and headwinds from central bank rate hikes," Citi chief economist Nathan Sheets wrote in a client note Wednesday.
"Reflecting these factors, the global economy is likely to endure 'rolling' country-level recessions during the coming year."
Citi believes the eurozone and U.K. will enter a recession by the end of this year. The U.S. stands to enter a recession by mid-2023, Sheets believes, as the full impact of higher interest rates from the Federal Reserve is felt on consumers and businesses.
The relative winner, believe it or not, may be China.
"We see growth [in China] accelerating as the authorities soften the zero-Covid policy," Sheets wrote.
"Still, excluding China, global growth next year will be running close to some definitions of global recession. More positively, many of the recessions in our forecast are relatively mild and should help pave the way for improved performance by early 2024."