Oliver Mangan: Down, but not out – world economy may avoid recession

Growth forecasts for China are being revised upwards as it abandons its zero-Covid strategy. Picture: AP /Andy Wong

The World Bank, in its latest Global Economic Prospects report released earlier this month, warned that the global economy is perilously close to falling into recession this year. It said the world economy could register one of the weakest rates of growth seen in recent decades in 2023, following a year of very high inflation, worsening financial conditions, and Russia’s invasion of Ukraine.

This follows similar downbeat assessments for 2023 published towards the end of last year by the IMF and OECD. They added that the risks to the outlook were skewed to the downside and so an even weaker outturn was quite possible. Very high inflation combined with likely interest rate hikes of 400-500bps in many major economies has greatly increased the risks of a recession in 2023.