WSJ “The world economy will be less bad than expected… It may hit bottom next year” :: No. 1 tax accounting economic newspaper

There is a high possibility of economic contraction early next year, but a rebound in China… ‘It’s too early to be optimistic’

◆… A shopping mall in Berlin, Germany[신화 연합뉴스 자료사진. 재판매 및 DB 금지]

While growth in the global economy is slowing, economists do not think it will be as severe a downturn as feared just a few months ago, The Wall Street Journal reported on the 23rd (local time).

According to the newspaper, there are also observations among economists that the global economy could bottom out sometime next year.

Chris Williamson, chief business economist at S&P Global, told the WSJ, referring to Europe, which has been hit hard by soaring energy prices, “a recession is expected, but the latest indicators are hopeful that it may not be as severe in scale as previously feared.” give,” he said.

The composite Purchasing Managers’ Index (PMI) for the manufacturing and service sectors in the eurozone announced by S&P Global on the same day was 47.8, up slightly from the previous month (47.3), but still below the baseline of 50. A reading below 50 indicates a contraction in the economy.

Therefore, the newspaper pointed out that the European economy is likely to show negative growth for the fourth quarter of this year and the first quarter of next year in a row.

Some economists are talking about the possibility that the US economy, which is relatively healthy, will also show negative growth for two consecutive quarters in the first half of next year in the aftermath of the Federal Reserve’s rapid monetary tightening policy.

In fact, the minutes of the November Federal Open Market Committee (FOMC) regular meeting released by the Fed on this day included the word recession for the first time since the start of interest rate hikes in March, as well as predicting a nearly 50% probability of entering a recession next year.

However, many economists are cautious about the prospect of a global recession, despite an almost sluggish start early next year, the WSJ reported.

 

◆… People in protective clothing in Beijing, China[AP 연합뉴스 자료사진. 재판매 및 DB 금지]

One reason why the economy may be less bad than expected is the possibility of a rebound in China’s economy.

It is an observation that if China, which has sacrificed economic growth with a strict ‘zero corona’ quarantine policy after the novel coronavirus infection (Corona 19), will gradually open its doors, it can make up for the economic contraction in other regions such as Europe.

Experts predict that next year’s global growth rate will decline significantly from this year to around 2%, but it will still continue to grow slightly.

The situation in Europe and America also appears to have escaped the worst.

Europe, which faced the possibility of a winter energy crisis in the aftermath of Russia’s invasion of Ukraine, is expected to be able to avoid the energy rationing system it was concerned about.

Economists at investment bank Barclays had forecast eurozone growth of -5% in the worst-case scenario, but recently raised it to -1.3% as concerns about the energy crisis eased.

However, there are counterarguments that it is too early to be optimistic that next year’s economic downturn will be less severe.

In the case of the US economy, it is in a state of great uncertainty about how high the Fed will raise the base rate, and the Chinese economy also faces an increase in the number of corona19 infections in winter, so it is difficult to guarantee when the ‘zero covid’ quarantine policy will be released.

Alvaro Ferreira, acting chief economist at the Organization for Economic Co-operation and Development (OECD), said the risk of things going wrong is “increasing than it was in the past few months.”

The article is in Korean

Tags: WSJ world economy bad expected .. hit bottom year tax accounting economic newspaper

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