Global Economic recession. How bad will it be ?

According to the UN news, the world economy outlook is looking uncertain and darker. The economies of the United States, China and Europe are set to go through more hardships. These include higher inflation, a lower employment rate, and more instability in the stock market.

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As most countries were emerging from successive lockdowns, they were trying to recover from the pandemic. Then, the conflict between Russia and Ukraine came and worsened the already gloomy economic situation.

As a result we are assisting to continuous inflation;

Up to 9.8% in the EU from the beginning of the year 2022 according to Eurostat and 8.5% in the USA according to trade economics.

A near drought across Europe has occurred subsequently. It has added to the chaotic energy situation. This situation is amplifying the cost of gas supply and inflation.

Governments are trying to control inflation and the hike in energy prices. They are manipulating interest rates. They are also providing subventions to keep the cost of energy as low as possible. Despite these efforts, international organisations like the IMF and economists are flashing a red warning light. They warn about what could be the worst recession of the decade.

Goldman Sachs Group is concerned about the cost of living pressure in the UK. This is due to a persistent energy crisis. They are forecasting a recession in the 4th quarter of the year.

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Some other economists revealed to CNBC that a US Recession will have a biggest hit on certain Asian countries. They have found these countries to be more vulnerable. This is due to the proven correlation between their GDP and the US GDP.

Ex: Singapore and Thailand

The stock market and indices such as the S&P500 are not exempt from this cloudy economic situation. We see indices and companies’ stock prices falling to their lowest level.

How bad do you think the world economy will be hit by the recession ?