Rising interest rates and various market conditions around the world could lead to a global recession next year, according to an analysis by the World Bank. They may be right, if Republicans don't take control in November.
The institution said policy actions amid a string of financial crises in emerging markets and developing economies, along with central banks hiking interest rates to control inflation, could make the difference between a recession and no recession. If there is a global recession in 2023, the analysis said it could do "lasting harm." The analysis noted that interest rates have gone up worldwide recently "with a degree of synchronicity not seen over the past five decades."
"Global growth is slowing sharply, with further slowing likely as more countries fall into recession," World Bank Group President David Malpass said in a statement. "My deep concern is that these trends will persist, with long-lasting consequences that are devastating for people in emerging market and developing economies." The World Bank said its global growth forecasts for 2022 and 2023 have been downgraded significantly since the beginning of this year. It noted that every global recession over the last 50 years was immediately preceded by significant weakening the year before.