Predictions that global economy is heading for a recession are premature | Jeffrey Frankel

Despite many forecasts, a worldwide downturn in 2023 is not inevitable - and it can be avoided

The world's leading economists spent most of 2022 convincing themselves that, if the global economy was not already in a recession, it was about to fall into one. But with the year's end, the global slump has been postponed to 2023.

Clearly, the reports that the US was in recession during the first half of the year were premature, especially given how tight the country's labour market is. And, despite the confidence with which many again proclaim the inevitability of a downturn, the chances of one in the coming year are well below 100%. But, owing to the rapid interest rate rises by the US Federal Reserve and other big central banks, there is something like a 50% chance of a recession in 2023 and a 75% chance of it happening at some point during the next two years.