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05-07-2022, 03:27 PM
https://www.businesstimes.com.sg/governm...ths-nomura
Many major economies to hit recession over next 12 months: Nomura
MANY major economies will enter recessions over the next 12 months amid tightening government policies and rising living costs, pushing the global economy into a synchronised growth slowdown, according to Nomura Holdings.
The brokerage expects the euro zone, the UK, Japan, South Korea, Australia and Canada to fall into recession along with the US, Rob Subbaraman and Si Ying Toh at Nomura said in a research note.
Still, central banks looking to restore their inflation-control credibility are likely to err on the side of tightening policy too much even if it sacrifices growth, before cutting rates in 2023, they said.
“Increasing signs that the world economy is entering a synchronised growth slowdown, meaning countries can no longer rely on a rebound in exports for growth, have also prompted us to forecast multiple recessions,” they wrote.
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In Europe, the slump could be much deeper if Russia entirely cuts off gas to Europe, the economists said. Nomura sees both the US and the euro area economies contracting 1 per cent in 2023.
For mid-sized economies, including Australia, Canada and South Korea, there’s a risk of deeper-than-forecast recessions if interest rate hikes trigger housing busts, they said.
Korea is seen taking the sharpest early hit with a 2.2 per cent contraction in the third quarter of this year. Japan is forecast to have the mildest recession of the group thanks to ongoing policy support and its delayed economic reopening, they added.
Many major economies to hit recession over next 12 months: Nomura
MANY major economies will enter recessions over the next 12 months amid tightening government policies and rising living costs, pushing the global economy into a synchronised growth slowdown, according to Nomura Holdings.
The brokerage expects the euro zone, the UK, Japan, South Korea, Australia and Canada to fall into recession along with the US, Rob Subbaraman and Si Ying Toh at Nomura said in a research note.
Still, central banks looking to restore their inflation-control credibility are likely to err on the side of tightening policy too much even if it sacrifices growth, before cutting rates in 2023, they said.
“Increasing signs that the world economy is entering a synchronised growth slowdown, meaning countries can no longer rely on a rebound in exports for growth, have also prompted us to forecast multiple recessions,” they wrote.
.....
In Europe, the slump could be much deeper if Russia entirely cuts off gas to Europe, the economists said. Nomura sees both the US and the euro area economies contracting 1 per cent in 2023.
For mid-sized economies, including Australia, Canada and South Korea, there’s a risk of deeper-than-forecast recessions if interest rate hikes trigger housing busts, they said.
Korea is seen taking the sharpest early hit with a 2.2 per cent contraction in the third quarter of this year. Japan is forecast to have the mildest recession of the group thanks to ongoing policy support and its delayed economic reopening, they added.
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