A global survey highlighted that 60% of CEOs wait for a recession by 2023. JPMorgan has a more pessimistic scenario, with an 85% chance of an imminent recession.
According to a Citigroup report, the probability that the world will go through a recession is 50%. Especially at a moment when central banks strengthen monetary control bills and demand for goods weakens, along with the acquisition of essential services.
Similarly, the CEO of Deutsche Bank, Christian Sewing, explained this Wednesday at a financial congress in Frankfurt that the global economy is walking the pathway to a recession while central banks redouble their efforts to keep inflation under control.
According to Sewing, while Deutsche Bank had highlighted raising interest rates as its first strategy to restrain inflation, the pace of increases observed from central banks has surprised it.
Sewing said that at least they have a 50% chance of a recession globally. In the US and Europe, on the other hand, there is a slight chance of experiencing a recession in the second half of 2023, while at the same time, there might be high peak interest rates, a higher rate than the forecasts experienced before the conflict would break out in Ukraine.
Other Entities are Observing a Difficult Outlook
Sewing’s comments run in parallel with claims by a team of Citigroup economists, who spoke about a prediction citing supply shocks and an increasing trend for interest rates.
Previous phenomenons in history highlight that disinflation often carries considerable costs to growth and the probability of recession which is now approaching 50%,” the Citigroup economists also expressed that Central banks can still build up the soft landings. However, this action will need supply shocks to sustain itself and demand to remain enacted.
A global survey of CEOs and other managers, published last Friday the 17th, highlighted that 60% of these senior managers wait for a recession before the end of 2023.
An even more pessimistic prediction got provided by JPMorgan economists, who think that the probability of a recession is 85%, much higher than that expressed by Deutsche Bank and Citigroup.
Regarding the historic crashes in the S&P 500 index, the portfolio manager at the GPM firm, Hugo Ferrer, expressed that the fall of more than 20% of the said index on June 13 was a clear demonstration that the world is already in the middle of a recession. So far this year, both bitcoin and other digital currency stocks have experienced negative returns.
By: Jenson Nuñez
