According to Bloomberg, Nomura Holdings Inc predicted in research that several major economies would enter recession in the next 12 months due to rising living costs and stricter government regulations. According to Nomura’s Rob Subbaraman and Si Ying Toh in a research note, the brokerage company expects the EU, the UK, Japan, South Korea, Australia, Canada, and the US to enter a recession, sending the global economy into a synchronized economic slowdown.
According to them, central banks are likely to mistake tightening monetary policy in an attempt to rein in inflation at the cost of losing growth before lowering rates in 2023. ‘Increasing evidence that the world economy is undergoing a synchronized growth slowdown, implying that nations can no longer rely on a rise in exports for growth,’ they stated.
According to Nomura, the extent of the recession will differ per country. In the United States, a five-quarter-long recession began in the fourth quarter of this year. As per the analysts, if Russia completely shuts off the gas to Europe, the collapse in Europe will be considerably worse. The Japanese financial services firm Nomura sees both the US and the euro area economies contracting 1 per cent in 2023.
They warn of the potential of deeper-than-expected recessions in mid-sized economies such as Australia, Canada, and South Korea if interest rate rises induce property collapses. Japan is expected to experience the mildest recession of the group due to continuous policy assistance and its delayed economic recovery, they noted. China is an anomaly, they say, as its economy recovers thanks to accommodating measures, but it remains vulnerable to fresh lockdowns as long as Beijing persists in its zero-Covid plan.
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