Two-thirds of executives in charge of corporations and large international firms believe there will be a global recession in 2023, according to a survey conducted by the World Economic Forumreleased hours before its annual meeting in Davos begins.
Private sector leaders who participated in the analysis have said they plan to cut costs significantly in response to the negative economic environment, while economists are optimistic about reining in inflation and overall balance sheets.
For those surveyed, geopolitical tensions will continue to weigh heavily on the course of the world economy and they anticipate that monetary policies will continue to tighten in Europe and the United States.
The outlook is especially pessimistic for Europe, where 100% of those surveyed foresee “weak or very weak” economic growth this year, a percentage that drops to 91% in the case of the United States, 68% in Latin America and 48%. % in China.
In the case of the Asian giant, the survey reflects some optimism regarding the lifting of restrictive measures to control the spread of COVID-19 and that this will boost some growth, although there is also uncertainty about the possible impact that this may have on the Chinese public health.
HIGH INFLATION
Those surveyed who believe that high inflation will continue in Europe amount to 57%, while in the case of Latin America they drop to 45%, for the United States to 24% and in China they are only 5%.
On the other hand, the majority are those who expect monetary policy to continue its trend towards restriction both in Europe (59% of those surveyed) and in the United States (55%).
“The global economy is in a precarious position. High inflation, accompanied by low growth, high debt levels and a fragmented environment reduce the incentives for that much-needed investment to return to growth”, analyzed the managing director of the World Economic Forum, Saadia Zahidi.
Regarding the cuts that companies are expected to have to assume, 86% anticipate that it will be a matter of reducing operating costs, 78% fear layoffs and 77% favor the optimization of supply chains.
On the positive side, those surveyed believe that the crisis has already reached its peak, since 68% think that the situation will be less serious at the end of 2023 than it is today. Also, 64% expect the energy difficulties to ease in that period.
