Global Recession Probability Approaches 50%: Citigroup Economist


Citigroup economists predict that the global recession could be close to 50% as central banks raise interest rates and consumer demand for commodities declines.

“Historical experience suggests that disinflation often brings meaningful costs to growth, and the total probability of a recession is now approaching 50%,” said an economist led by Nathan Sheets. I am saying. Wednesday report..

“Central banks may still design soft or” soft “landings embodied in their predictions (and our predictions), but this is supply shock and resilience to decline. Needs demand to maintain. “

According to the report, Citigroup economists currently predict that the global economy will grow by 3% this year and 2.8% next year.

They added that if a recession occurs, it is likely to be a “garden type” where unemployment rises by a few percent and production experiences a few weak quarters.

“I think this is a reasonable expectation, but the wildcard is, as we emphasized, how the dynamics of stubborn inflation will ultimately prove,” they said. rice field.

The pessimistic predictions by Citigroup economists were made shortly after the investigation by a business research firm. The Conference Board has found that more than 60% of global CEOs anticipate a recession in major business establishments at or before the end of 2023.

Meanwhile, according to a June 17 survey, 15% of CEOs claim that their area is already in recession (pdf).

CEOs say the war in Ukraine, fluctuations in energy prices, renewed supply chain turmoil, diminished consumer confidence, and the blockade of COVID-19 in China all “put downward pressure on growth and CEO confidence. Is significantly reduced. ” Gloves. “

“These turmoil, along with restrictive monetary and fiscal policies, have fueled expectations of a recession,” the report said.

In addition, more than half of the CEOs surveyed (51.3%) manage inflation by passing price increases downstream, and 47.1% of CEOs cut costs to offset soaring inflation, according to the report. I am.

Especially in the United States, where inflation reached 8.6% in May, there is growing concern that a recession may be imminent, and the Fed has raised its benchmark interest rate by 75 basis points this month. ..

Economist Bloomberg Monthly Survey found The probability of a recession over the next 12 months is 30%, the highest since 2020.

Meanwhile, JP Morgan’s strategist Predict In the US Federal Reserve’s monetary tightening policy, the US recession is 85% likely, but in the European Union that number rises to 80%.

But Wall Street veteran strategist David Roche said Friday’s CNBC “Squawk Box Asia” He believes that a “global recession” is unlikely, but said that in Europe a real recession could occur.

“What you’re explaining can cause many problems at the same time, and many of them can’t be undone like war, so the world can be most worried about recession,” Roche said. rice field. President and Global Strategist of Independent Strategy. “I think it’s inevitable in Europe, but it’s not the recession of the global recession, but the world will be worried about what I think most, at least for the next few months,” Roche said. I added.

US Treasury Secretary Janet Yellen also said on Sunday that “unacceptably high” inflation will continue for the rest of the year, but the US recession is not “unavoidable.”

Catabella Roberts


Katabella Roberts is a reporter currently based in Turkey. She focuses primarily on the United States and covers the news and business of The Epoch Times.