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“2023 Recession: Are We There Yet?”

The Coronavirus pandemic has caused havoc around the world, and it’s been difficult to accurately predict the economic effects. As the second wave of the virus puts more pressure on global economies, many people are understandably asking the question – “Are we in a recession?”.

The simple answer is – yes. Global economies are in a recession due to the ongoing global economic impacts of the Coronavirus pandemic, which has created a contraction in global output, unemployment, investment, and economic demand.

Looking back to the start of the pandemic in late 2019, the economic impact of the virus on the global economy has been swift and severe. The International Monetary Fund (IMF) estimates that the global economy will contract by 4.4% in 2020, the steepest decline since the Great Depression of the 1930s. Unemployment rates have skyrocketed from 4.9% in February 2020 to 9.0% in December, while industrial production and investments have declined significantly across the world.

However, the outlook for the global economy in 2021 is somewhat brighter as countries gradually begin to open up their economies and slowly get back to some semblance of normality. The IMF’s World Economic Outlook for 2021 estimates that global growth will be 5.4%, far higher than 2020’s global contraction of 4.4%.

Looking further ahead to 2023, the outlook is not necessarily as bright. Although global economic growth will continue to approach pre-pandemic levels, analysts predict that the economic aftereffects of the Coronavirus pandemic will linger for years to come. In fact, the IMF predicts the global economy may yet face a new recession in 2023, citing rising geopolitical tensions and slow vaccine rollouts as major contributors to the potential downturn.

Despite the gloomy outlook, it’s worth noting that recessions can provide opportune times for economic investments and growth. Key industries such as technology, energy, healthcare, food, and automotive have seen considerable growth even during the pandemic, and savvy investors have been quick to jump on these opportunities.

So, are we in a recession? The answer is yes, and it’s uncertain when the global economy will fully recover. Nevertheless, it behooves investors and businesses to remain vigilant and seize opportunities to adapt to the current environment and potentially reap long-term rewards.

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