40 Per Cent Chance Of Recession In US, Other Key Economies Face High Risk: Report

There is a median 40 per cent chance of recession happening in the world's largest economy in 2023, and those chances have risen for the euro zone and Britain, too

US consumer confidence also slipped in July to the lowest level since February 2021 on weakening economy amid persistent inflation.

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A latest poll of economists have hinted that the global economy is facing serious threats of a slowdown with some key economies at high risk of recession. There is only sparse meaningful cooling in inflation over the next year, predicted economists in Reuters poll. On Tuesday, the US stocks were down extending losses from earlier session as earnings news raised more fears about the economy ahead of another big rate hike from the Federal Reserve.

US consumer confidence also slipped in July to the lowest level since February 2021 on weakening economy amid persistent inflation, reported news agency Bloomberg.

The US Federal Reserve may hike rates by another 75 basis points later on Wednesday which hints at the growing recession fears. The US inflation which is at a four-decade high of 9.1 per cent, is not expected to cool to the Fed's 2 per cent target until at least 2024.

The rising inflation has pushed the cost f living in much of the world raising recession risks. According to the Reuters poll of economists, there is already a median 40 per cent chance of recession happening in the world's largest economy in 2023, up sharply from three months ago, and those chances have risen for the euro zone and Britain too.

“Recessionary dynamics are increasingly evident in our forecast. Notably, we now see several major economies, including the United States and the euro area, slipping into recession. Even so, the timing of these downturns varies, and they are expected to be relatively mild," noted Nathan Sheets, chief global economist at Citi.

"By any metric, the global economy is slowing and prospects are deteriorating. Global recession is, indisputably, a clear and present danger."

The global growth is estimated to slide tp 3.0 per cent this year followed by 2.8 per cent next, both downgraded from 3.5 per cent and 3.4 per cent in the last quarterly poll in April. That compares with the International Monetary Fund's latest forecasts of 3.2 per cent and 2.9 per cent.