World Economic Prospects: A weak 2023, but no global recession

July/August 2022

Each month Oxford Economics’ team of 300 economists and analysts updates our baseline forecast for 200+ countries using our innovative Global Economic Model. Fully linking individual country models through global assumptions about trade volume and prices, competitiveness, capital flows, interest and exchange rates, and commodity prices, our model provides a rigorous and consistent structure for forecasting and understanding the impact of economic shocks. Below is just the top-level summary of our analysis of the latest economic developments.

• We now expect global GDP growth to ease from 3% in 2022 to just 2.4% in 2023, 0.6ppts lower than our forecast a month ago and well below the post-GFC average.
• Central banks are firmly focused on bringing inflation down, irrespective of the economic cost.
• Our baseline assumes that a global recession is avoided, but the chances of country-level recessions have grown, with Europe now looking particularly vulnerable.

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