Rapid policy tightening fuels businesses’ recession fears

The July Global Risk Survey was conducted at a time when central banks in major economies were sharply raising policy rates. The potential fall-out for the global economy is prominent in our results, with 1-in-4 respondents now citing rapid policy tightening as the top near-term global economic risk.

What you will learn:

• Businesses are increasingly concerned about the impact of rapid central bank policy tightening on global growth, based on our latest survey of risk perceptions. Respondents see almost a 60% chance of the eurozone following the US into technical recession in the next 12 months. 
• Tighter policy already appears to beaffecting businesses’ inflation expectations. The perceived chance of very high (6%+) world inflation next year has halved since our previous survey. 
• Despite the sharp rise in inflation over the past year, the mean expectation for world inflation in the medium term has risen only marginally. But businesses see material upside risks, with a 1-in-5 chance of inflation remaining above 4% over the medium term.