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Several big economies, including the eurozone, the United Kingdom, Japan, South Korea, Australia, the United States and Canada, will witness recession over the next 12 months due to tightening government policies and rising living costs, according to Japan-based Nomura Holdings, which recently said this will push the global economy into a synchronised growth slowdown.
The depth of recession will vary. Nomura expects the United States to see a shallow but long recession of five quarters starting from the final quarter of this year. In Europe, the slump could be much deeper if Russia entirely cuts off gas to Europe.
Several big economies, including the eurozone, the United Kingdom, Japan, South Korea, Australia, the United States and Canada, will witness recession over the next 12 months due to tightening government policies and rising living costs, according to Nomura Holdings, which recently said this will push the global economy into a synchronised growth slowdown.
The brokerage foresees both the United States and the euro area economies contracting by 1 per cent in 2023.
For mid-sized economies, including Australia, Canada and South Korea, there’s a risk of deeper-than-forecast recessions if interest rate hikes trigger housing busts, Rob Subbaraman and Si Ying Toh at Nomura said in a research note.
South Korea may take the sharpest early hit with a 2.2 per cent contraction in the third quarter of this year. Japan is projected to have the mildest recession due to ongoing policy support and its delayed economic reopening, global newswires reported.
China too remains at risk of renewed lockdowns as long as Beijing sticks to its zero-COVID strategy, the researchers wrote.
Fibre2Fashion News Desk (DS)
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