what to expect
Major institutions such as the International Monetary Fund (IMF) and the Federal Reserve are adamant: the world is on the brink of recession. Has it already started in Europe and what are the predictions for 2023? We take part.
Europe: has the recession already started?
Europe’s economic situation is at a tipping point. The Old Continent is currently experiencing the concrete consequences of managing Covid-19, the war in Ukraine and the energy crisis. In dire straits, the European Central Bank raised its interest rate, and can make that choice again at the end of October.
Faced with this, some believe that Europe is already in recession. That’s the case with JP Morgan CEO Jamie Dillon, who explained last week:
“There are very serious reasons that can push the United States and the world – Europe is already in recession – to go into some kind of decline for six to nine months. »
Recall that a recession occurs when the economic activity of all sectors of a geographic area slows down sharply. Often with waves of layoffs and rising unemployment. According to the latest forecasts of the Organization for Economic Co-operation and Development (OECD), Europe will experience the most significant changes. With an increase of only 0.3% in 2023.
? To go further – Purchasing power and cryptocurrencies: can they help hedge against inflation?
The CEOs of the world are preparing for the recession in Europe
This, of course, has not gone unnoticed by the heads of large global corporations that are preparing for recession. According to a report by the Conference Board, 99% of CEOs surveyed from 60 different countries, was already preparing for a recession in Europe.
A forecast shared by the OECD explained in its report that this winter’s temperatures – coupled with dependence on Russian gas – will have a strong impact on the extent of the coming recession. As for the German economy, the institution even 0.7% growth is expected to decline.
Last week’s IMF report was equally pessimistic. Pierre-Olivier Gourinchas later explained:
“To summarize, the worst is yet to come. […] For many people, 2023 will look like a recession. »
? On the same topic – Germany is aware: Economy Minister announces recession
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Prospects and locations of cryptocurrencies
So what to take away from all this? First of all, 2023 will not be fun for all world economies. But this is also taken by central banks in a cycle they cannot escape easilyand reluctantly plan to consistently increase their rates.
Faced with this, alternative assets such as cryptocurrencies will play their role ? As we have seen, Bitcoin (BTC) and its peers have shown characteristic resilience when the Covid-19 crisis unfolds. Crypto-assets have the potential to return to the limelight in 2023 during the European economic slowdown… But only if investors show great interest.
In hyperinflationary countries, especially in South America, we have seen the natural adoption of cryptocurrencies by citizens interested in protecting their savings. Will this practice become more democratic in Europe? Next year will tell.
? Read also – 12% of Argentines have adopted cryptocurrencies to hedge against inflation.
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Sources: OECD, Conference Board, IMF report
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A journalist at Cryptoast, I fell into the cauldron of cryptocurrencies a few years ago. I’m passionate about innovative technologies stemming from blockchain and I love finding the crunchiest information to share with you.
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