**A Global Recession Is Likely in 2023 – Here’s What You Need to Know**
**Economic experts predict a high risk of a global recession in 2023.** The World Bank has warned that the global economy is on the brink of a recession, with a 40% chance of a sharp slowdown in growth in the coming year. The International Monetary Fund (IMF) has also downgraded its global growth forecast for 2023, citing rising inflation, interest rate hikes, and the war in Ukraine as major factors contributing to the economic downturn.
**What is a recession?**
A recession is a period of economic decline that lasts for at least two consecutive quarters. It is characterized by high unemployment, low business investment, and a decline in economic activity.
**What causes a recession?**
Recessions can be caused by a variety of factors, including:
* **Economic shocks:** A sudden event, such as a financial crisis or a natural disaster, can trigger a recession.
* **Interest rate hikes:** The central bank may raise interest rates to combat inflation, which can slow economic growth.
* **Fiscal austerity:** Governments may reduce spending or raise taxes to reduce their budget deficits, which can also slow economic growth.
**What are the risks of a recession?**
A recession can have a significant impact on individuals and businesses. It can lead to:
* **Job losses:** Businesses may lay off workers to reduce costs.
* **Reduced income:** Workers who lose their jobs or see their hours cut will have less money to spend.
* **Business closures:** Businesses may close due to declining sales.
**How to prepare for a recession?**
There are several steps you can take to prepare for a recession:
* **Save money:** Set aside as much money as you can in a savings account or emergency fund.
* **Reduce debt:** Pay down your debt as much as possible, especially high-interest debt.
* **Secure your job:** If you are worried about losing your job, update your resume and network with other professionals in your field.
* **Explore new income streams:** Find ways to earn extra money, such as starting a side hustle or freelancing.
**A recession can be a difficult time, but it is important to remember that it is not permanent.** The global economy has weathered recessions before, and it will weather this one as well. By taking steps to prepare, you can reduce the impact of the recession on your finances and your life.
**Additional resources:**
* [The World Bank’s latest Global Economic Prospects report](https://www.worldbank.org/en/news/press-release/2022/06/07/global-economy-to-grow-by-2-9-percent-in-2023-amid-multiple-headwinds)
* [The IMF’s latest World Economic Outlook report](https://www.imf.org/en/Publications/WEO/Issues/2022/04/19/World-Economic-Outlook-April-2022-525882)
* [The Federal Reserve’s latest Economic Projections](https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20221214.pdf).
