The US Economy Is Under Recession But India Is Safe
Reuters polls of economists predict a slowdown in the global economy including the US which is the largest economy in the world. But they say India faces no such threat.
- The report forecasts a 3% slowdown in the global economy followed by 2.8% the next year compared to the 3.5% and 3.4% in the last quarterly poll in April.
- The poll covered 48 economies out of which 77% were downgraded for the next year only, 13% are left unchanged, and 10% upgraded.
- The poll covered the top 19 global banks out of which 11 are forecast to see inflation returning next year.
- The remaining 8 banks will remain safe. They include the Fed, the European Central Bank, the Bank of England, and the Reserve Bank of India.
- The US Federal Reserve is expected to increase rates by another 75 basis later this week. It is an indication of inflation being at a four-decade high of 9.1%.
- The US has only a 40% chance of seeing recession but it is sharply up from three months ago. The chances of recession have also risen for the euro zone and Britain.
- Inflation forecasts for 48 economies show no quick relief from a cost of living in those countries. The inflation report of 90% of the economies has been upgraded for the next year and over 45% for 2024.
- Recessionary dynamics are increasingly evident in the forecast. Nathan Sheets, the chief global economist at Citi, forecast the major economies including the US slipping into recession.
- Nathan Sheets further maintained that the timing of recession could vary and the effect could be relatively mild.
- Noted Ethan Harris, global economist at Bank of America Securities, said that the economists were concerned about the aggressive hikes at many central banks as an inevitable outcome of moving late.