The world economy will have its worst year in 30 years
As the energy shock caused by the Russia-Ukraine conflict continues to have an impact, the world economy is facing its worst year in 30 years. Economists forecast that the US economy will grow at only 2.4% in 2023, which is down from 3.2% expected this year, and the lowest level since 1993 (not including 2009 and 2020). However, the fate of countries around the world may be different. Beginning in 2023, the Eurozone will fall into recession, and by the end of 2023, the US will fall into recession. In terms of monetary policy, differences among countries will also gradually become apparent. In the US, as wage increases will keep inflation above target levels, the Federal Reserve will move towards a 5% terminal interest rate and will maintain that rate until the first quarter of 2024. Meanwhile, in the Eurozone, a faster decline in inflation will mean lower terminal interest rates, and there is a possibility that the ECB will cut interest rates at the end of 2023.
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