A global recession is not imminent, but brace for rising costs and slower growth, economists say.
“There will be no sudden ‘after’ of stagflation,” said Simon Baptist, global chief economist at the Economist Intelligence Unit, referring to a surprise recession after a period of stagflation.
As the war in Ukraine and pandemic disruptions continue to wreak havoc on supply chains, stagflation — marked by low growth and high inflation — will stick around “for at least the next 12 months,” Baptist told CNBC last week.
“Commodity prices will start to ease from next quarter, but will remain permanently higher than before the war in Ukraine for the simple reason that Russian supplies of many commodities will be permanently reduced,” he added.
The pandemic as well as the war in Ukraine have stifled supply of commodities and goods and upended efficient distribution through global supply chains, forcing up prices of everyday goods such as fuel and food.