The ghost of the economic recession in 2023 is still present

The high inflation that has been occurring in different countries of the world, heto volatility of the economy and the banking crisis could lead to an economic recession in the second half of this year.

(See: Probabilities of a recession increased by the banking crisis).

The Federal Reserve (Fed) of the United States, In its March minutes, it estimated that given its assessment of the possible economic effects of recent events in the banking sector, the projection shows a slight recession starting at the end of 2023, “with a recovery in the following two years.”

Along the same lines, members of the International Monetary Fund (IMF), They indicated that they also included in their forecasts a slight recession, in the same period foreseen by the Fed.

Now, the director of the IMF, Kristalina Georgieva, affirmed on Thursday that the global growth forecast for the coming years, which will be around 3%, It can never be considered “fabulous,” even if it’s far from recessionary, according to the agency. EFE.

(See: Goldman Sachs projects lower economic growth in the United States).

Taking a look at the factors that can trigger a recession, Alejandro Useche, a professor at the Universidad del Rosario, indicated that high inflation and the solutions of countries to attack them, Like high interest rates, they have led to a slowdown in the economy.

“In recent weeks the planet is facing some very complex situations that have to do with the high volatility of certain financial assets, but above all serious financial crises of entities that were supposed to be strong. This is leading to uncertainty and raising the perceived risk levels, but at the same time, it is being understood that they are localized problems, very different from the great financial crisis that happened in 2008.Useche said.

(See: Recession and inflation: how will the economy fare in 2023?).

In turn, Munir Jalil, director of economic research at BTG Pactual, pointed out that after a positive start associated with the potential control of inflation and better performance, the IMF has revised downward the economic growth for April.

“For Latin America, the IMF also revised downward its expectation of economic growth, due to lower global demand for basic goods and the restrictive monetary policies that countries have had to adopt to control inflation,” said the analyst.

Likewise, Theodore Kahn, associate director of Control Risks, explained that a recession risk had been announced for several months due to rises in high interest rates.

(See: 2023, an economically difficult year for Colombia).

“This instability seems to be contained and a possible recession this year would be moderate, with a quick recovery. However, there are still unknown risks. Still other episodes of banking and financial instability may arise”, he assured.

DIANA K. RODRIGUEZ T.
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