13:18 23 June 2022
There is a 50% probability that the world is going into recession
The world economy's likelihood of recession is already approaching 50 percent. This is what economists at Citigroup, of which Citi Bank is a part, are now predicting.
The world's central banks have been tightening monetary policy in response to high inflation. In the United States, where the level of price increases has been unprecedented in years, in response to the U.S. Federal Reserve raising rates. Many countries are struggling with slowing consumer demand. These two factors increase the likelihood of a recession.
"Historical experience suggests that disinflation often carries high costs. In our view, the probability of a recession is approaching 50 percent," they wrote in a recent report cited by Bloomberg.
Citigroup forecasts at this point that the global economy will grow 3 percent in 2022 and 2.8 percent next year, Bloomberg reports. But if there is a slowdown, economists expect unemployment to rise a few percentage points and industrial production to face several quarters of underperformance.
