UK Think Tank Predicts Global Economic Recession Next Year

"Failing to Win the Inflation War... Facing Meager Growth Rates as the Cost of Lowering Inflation"
China Unable to Catch Up with the US by 2036

[Asia Economy Reporter Kwon Haeyoung] The global economy, which is expected to surpass the $100 trillion mark for the first time this year, is projected to sharply decline next year due to major countries raising interest rates to curb inflation, resulting in stagnation, according to the UK think tank Centre for Economics and Business Research (CEBR). Pessimistic views have also been raised that the global economy will face shocks and inflation far more severe than the Ukraine war due to the economic war between the United States and China.

On the 26th (local time), Bloomberg reported that CEBR released its annual World Economic League Table containing these findings.

CEBR stated, "(The world) has not yet won the war against inflation," and "central banks of each country will continue efforts to reduce inflation despite economic costs." It further predicted, "As a price for lowering inflation, the world will face meager growth rates for the next several years."

This survey result is more pessimistic than the recent forecast by the International Monetary Fund (IMF). In its October forecast, the IMF warned that more than one-third of the global economy would contract, global GDP growth would fall below 2%, and there is a 25% chance of a recession.

Despite this situation, CEBR expects the global GDP to double by 2037 due to growth in developing countries. As the balance of power shifts to the East Asia-Pacific region, the report predicted that the East Asia-Pacific region will account for more than one-third of global production, while Europe’s share will shrink to less than one-fifth.

The United States, the world’s largest economy, and China, engaged in a hegemonic war, are expected not to catch up with the U.S. until early 2036. This is six years later than the initially expected year of 2008. This is because China’s zero-COVID policy and escalating tensions with the West over trade are expected to slow China’s growth.

India is projected to become the world’s third-largest economy by 2032 and surpass $10 trillion in economic size by 2035.

CEBR analyzed, "The outcome of the economic war between China and the West will be several times more severe than the Ukraine war," and "it is almost certain to cause a rapid global economic downturn and inflation." It also noted, "The damage China will suffer will be several times more severe, which will hinder any attempts to drive the global economy."