Economists rule out the possibility of a global recession

Experts carefully monitor the situation in the world, calculating scenarios for further dynamics of world markets. According to Simon Baptiste, chief economist at the Economist Intelligence Unit, stagflation will continue for another 12 months, and its distinctive features will be low growth rates and high inflation. The reasons for this, in principle, are obvious – this is both the Covid-19 pandemic and the conflict in Ukraine, which led to a failure of the supply chains of goods and an increase in prices for everyday goods such as fuel and food.

At the same time, analysts do not say for sure that a recession will be inevitable after a period of stagflation, but they warn of the need to be prepared for higher costs and slower growth.

Forecasts for the second quarter of the year suggest a decline in commodity prices. At the same time, they will remain higher for a long time than before the situation in Ukraine, due to the gradual reduction of Russian supplies. 

Analysts deny the likelihood of a recession in Asia, too, if we keep in mind consecutive periods of negative GDP. Moreover, many consumers in the world have sufficient savings and are stocking up on durable goods, and the unemployment rate in many countries has reached its lowest level in recent decades.

At the same time, central banks around the world are raising interest rates to combat inflation. For example, the US Federal Reserve raised the rate by half a percentage point in May, warning of further increases.