Inflation: What if everything goes wrong at the same time? For the global economy, 2023 can be tumultuous

For the world economy, 2022 has been a terrible year. The combined hits from Russia’s invasion of Ukraine, China’s Covid-19 lockdowns and property correction, and amped-up Federal Reserve tightening will take global growth for the year down to 3.1%, way below expectations of a recovery-boosted 4.7% at the start of the year.

Could 2023 be worse? Absolutely.

Bloomberg Economics’ base case for global growth in 2023 is 2.4%. A deeper energy crunch in Europe, an earlier and more painful recession in the US, or more pandemic restrictions and an uncontrolled slide in real estate in China could conspire to make even that uninspiring number unattainable.

Drawing on scenarios from Bloomberg Economics’ country teams and using a suite of models to calculate spillovers between countries, we estimate that in a downside scenario global growth in 2023 could slide to -0.5%. Taken with the weak number for 2022,…

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