Business leaders in Davos say global recession ‘likely’ in 2023

DAVOS, 17 Jan 2023:

A survey found two-thirds of senior corporate and business leaders expect a global recession in 2023, the World Economic Forum (WEF) said yesterday, ahead of the annual meeting at Davos.

Private sector leaders surveyed by the WEF said businesses are expected to cut costs to withstand an economic slowdown but showed optimism about inflation.

“The global economy is in a precarious position,” said WEF managing director Saadia Zahidi.

Zahidi projected the investments needed to boost economic growth will be diminished due to “the current high inflation, low growth, high debt, and high fragmentation environment.”

In the survey, the experts said geopolitical tensions will continue to affect the global economy and anticipated further tightening of monetary policies in Europe and the US.

The forecast was particularly negative for Europe, where 100% of those surveyed expect “weak or very weak” economic growth this year – a percentage that drops to 91% for the US, 68% for Latin America and 48% for China.

In the case of China, the survey showed optimism regarding the lifting of the country’s so-called “zero-Covid” policy, which could fuel economic growth, but there were also concerns about the impact it could have on public health in the Asian giant.

On a more positive note, respondents said they believe the current economic crisis has already reached its peak, with 68% thinking the situation will be less severe by the end of 2023 than it is today.