How likely is a global recession in 2023?

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“Under the circumstances, even a moderate hit to the global economy over the next year could tip it into recession,” the report said.

Read more: RBC: Softer landing for Canadian economy growing more unlikely

However, the World Bank assured that central banks are in a position to control inflation without triggering a global recession – and this can be accomplished through “concerted action by a variety of policymakers.”

“Central banks must communicate policy decisions clearly while safeguarding their independence,” the report said. “This could help anchor inflation expectations and reduce the degree of tightening needed.”

“Fiscal authorities will need to carefully calibrate the withdrawal of fiscal support measures while ensuring consistency with monetary-policy objectives,” the World Bank added. “Policymakers should also put in place credible medium-term fiscal plans and provide targeted relief to vulnerable households.”

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