Economics: Rolling recessions lie ahead

A series of shocks look set to drive a deeper global slowdown

Global growth has already slowed quite a bit, as the reopening boom has faded and fiscal stimulus has been spent. Lockdowns in China and higher energy and food prices are starting to depress growth even further. China’s economy is already contracting.

Recessions look more likely than not in Europe and the US

An intense squeeze on real incomes could tip much of Europe into recession before the end of this year, too. And with the Fed set to tighten policy until inflation slows, we think a recession is now more likely than not in the US too, probably in 2023.

Growth concerns look likely to intensify, eclipsing inflation worries

As such, our updated forecasts envisage a series of rolling recessions across the global economy lasting for 12-18 months. Consequently, worries about inflation are likely to fade further, replaced by intensifying concerns about growth.