A challenging year for the world economy is expected to affect certain nations more severely than others.
Many bankers, economists, and business executives have warned that the year 2023 will bring a global economic slowdown that will cause many nations to enter a recession. According to IMF chief Kristalina Georgieva, who foresees a difficult year for the world, up to one-third of the global economy may experience a recession this year.
As wealthy nations won’t be able to avoid economic slowdowns, Georgieva predicted that simultaneous contractions in three major economies—the U.S., the EU, and China—will be the main causes of a worldwide recession.
UK in difficulty
However, certain affluent countries are expected to perform far worse than others in 2023 as a result of the pandemic’s lasting impacts and the war in Ukraine.
According to a Financial Times study published on January 2, over four-fifths of economists predict that the U.K. would be hit by a far longer recession than its peers, making it the country in the G7 with a deeper and more extended recession than any other country.
A clear majority of the 101 U.K.-based economists questioned by the Financial Times said that the U.K. is in for a considerably more severe economic recession than other G7 nations, one that will take longer to recover from.
The main causes of the U.K.’s rather bleak prospects, according to economists, are chronically rising inflation, a dwindling workforce, deteriorating trade relations with the EU, and a large exposure to the energy crisis brought on by the conflict in Ukraine.
A challenging year lies ahead
Inflation is expected to start to decline in 2024, according to the economists surveyed, and the U.K. economy will likely struggle for the rest of this year.
According to the survey, consumers will likely bear the brunt of the expense as inflation soars and borrowing costs rise in accordance with the Bank of England’s hike in interest rates. Economists used adjectives like awful and miserable to describe the consumer outlook for the upcoming year.
Poor performances
Although the U.K. economy is predicted to enter a recession this year as a result of high prices and a declining workforce, this is not the first time the nation’s economy has lagged behind that of its G7 counterparts.
According to the organization’s most recent economic forecast, which was issued in November, the U.K. is likely to see the greatest economic drop among wealthy countries as a result of the Ukraine war and the energy crisis.
