News from the Financial Associated Press, December 26 (edited by Ma Lan)The report released today by the Center for Economics and Business Research (CEBR), a British research institution, pointed out that the world economy will face a recession in 2023, and the high interest rates used to “suppress” inflation will cause many economies to contract.
According to the report, global GDP denominated in U.S. dollars will exceed 100 trillion U.S. dollars for the first time in 2022, and this figure is expected to reach 207 trillion U.S. dollars in 2037. But global growth will stagnate next year as major central banks continue to battle inflation and monetary policy remains predominantly tight.
It expects central bankers to stick to their tightening policy stance in 2023 regardless of the cost, at the expense of worsening economic growth prospects in the coming years.
CEBR’s forecast is more pessimistic than the International Monetary Fund’s (IMF) latest report in October, which said more than a third of the world‘s economies would contract in 2023, while global GDP growth in 2023 was likely to be below 2%. 25%, a standard that usually represents a global recession.
Losers and winners World GDP will double by 2037 as developing economies overtake rich countries, according to a CEBR report. East Asia and the Pacific will then account for a third of global output, while Europe’s share will shrink to less than a fifth.
CEBR’s research builds on underlying data captured in the IMF’s World Economic Outlook, which uses internal models to forecast growth, inflation and exchange rates.
The CEBR forecast also points out that China may overtake the US as the world‘s largest economy as early as 2036. The repeated epidemics and the intensification of trade friction between the East and the West may slow down the expansion of China’s economy.
In addition, CEBR predicts that India will become the third economy with an output value exceeding US$10 trillion in 2035 and the third largest economy in the world in 2032.
Emerging countries with abundant natural resources will also get a substantial boost in the energy transition, as fossil fuels remain irreplaceable in the transition to clean energy.
Meanwhile, Europe will inevitably decline. The report pointed out that in the next 15 years, the United Kingdom will remain the sixth largest economy in the world, and France will remain the seventh largest economy. However, due to the lack of new growth drivers and the lack of policies and plans, the UK will no longer enjoy a growth rate higher than that of European countries.
In addition, CEBR believes that it is quite challenging for the world to achieve environmental goals. The world is still a long way from the goal of achieving a per capita GDP of $80,000 and decoupling growth from carbon emissions, which means that further policy interventions are needed to meet climate commitments.