The probability of a full-fledged crisis in the global economy is 50 percent, according to the calculations of Citigroup analysts, Report informs referring to Bloomberg.
“The experience of history indicates that disinflation often carries meaningful costs for growth and we see the aggregate probability of recession as now approaching 50%,” the Citigroup economists wrote. “Central banks may yet engineer the soft -- or “softish” - landings embodies in their forecasts (and in ours), but this will require supply shocks to ebb and demand to remain resilient.”
Citigroup now sees the world economy growing 3% this year and 2.8% in 2023. Its economists said if a recession did occur it was likely to be a “garden variety” one in which unemployment rises several percentage points and output experiences a couple of weak quarters.
“We see this as a reasonable expectation, but the wildcard - as we have emphasized - is how stubborn inflationary dynamics ultimately prove to be,” they said.