Global economy headed to a recession next year: study

United Kingdom: According to the Centre for Economics and Business Research (CEBR), the global economy is headed to a recession in 2023 amid rising inflation.

The British consultancy in its annual World Economic League table, said that though the global economy surpassed $100 trillion for the first time in 2022, it is expected to stall in 2023, as governments find measures to fix the soaring prices.

"It's likely that the World economy will face a recession next year as a result of the rise in interest rates in response to higher inflation," said Kay Daniel Neufeld, Director and Head of Forecasting at CEBR.

"The battle against inflation is not won yet. We expect central bankers to stick to their guns in 2023 despite the economic costs. The cost of bringing inflation down to more comfortable levels is a poorer growth outlook for a number of years to come,” read the report.

Previously, the International Monetary Fund predicted that more than a third of the world economy will contract and there is a 25% chance of global GDP growing by less than 2% in 2023, which marks a global recession.

The data for the study is drawn from IMF's World Economic Outlook, by CEBR for the study and the agency uses an internal model to forecast growth, inflation and exchange rates.

According to the analysis, six years later than expected, by 2036, China is set to surpass the US to become the World’s largest economy.

"The consequences of economic warfare between China and the West would be several times more severe than what we have seen following Russia's attack on Ukraine. There would almost certainly be quite a sharp world recession and a resurgence of inflation," CEBR said.

"But the damage to China would be many times greater and this could well torpedo any attempt to lead the world economy."

Further, according to CEBR prediction, India will become the third-largest economy in the World by 2032 and become the third $10 trillion economy in 2035.