Wide Bands of Uncertainty for Global Economic Outlook

What was considered a remote risk is now becoming reality for several major economies around the world. While we still do not anticipate a global recession (see our primer on what a global recession is and what can trigger it), a global slowdown is certainly underway as Europe and the United States are descending into recessions and China continues to experience weaker growth.

There are myriad pathways to recession for the global economy and for individual major economies. In our latest publication, we enumerate the risks to our base case projections, which again call for a recession in both the United States and Europe before the end of 2022 and notably subdued growth in China. Overall risks to the global economy are more tilted to the downside than upside. The occurrence of one extreme event, or even a combination of several smaller unfavorable events, could thrust the world back into recession over the next 18 months. Risks are also tilted mainly to the downside for China and the United States, but are roughly balanced for Europe.

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