Blog Post - Views on the Economy and the World

Global Recession is Not Inevitable

| Aug. 28, 2022

Project Syndicate asked, “Is a Global Recession Inevitable?”   Steven Roach says, “yes”;  Anne Krueger says, “Depends…Certainly not inevitable”; & Jim O’Neill says, “Quite possible.”

My answer to the question, Is a global recession inevitable:

No. A global recession is entirely “evitable.”

True, the odds of a downturn are high in Europe, hard-hit by the need to manage winter without Russian natural gas; China, where Covid shutdowns already turned growth negative last quarter; and Emerging Market and Developing Economies, many of which have debt troubles.

The slowdown applies even for the US.  I still maintain that the two quarters of negative GDP growth reported by BEA do not signify that a US recession started in the first part of 2022. Three reasons: (i) Q1 GDP will be revised September 29; (ii) other important indicators like GDI and employment were positive; and (iii) the ruling is up to the NBER, not by a mechanical rule of two negative-GDP quarters.  But rising interest rates and the gloomy outlook among trading partners do mean that a US recession is much more likely than usual, at some point over the next two years.

But a “global recession”?  The US is not the only place where a negative growth rule is not an agreed criterion to define recession.   Consider global GDP.  It has been rare in the post-war period for global growth to fall below zero, even for a single quarter, let alone two.  Not even the severe downturns of 1974 and 1981 qualified. The explanation is that even in times of apparent recession, negative growth among Advanced Economies is usually outweighed by still-positive growth among Emerging Market and Developing Economies. (Two exceptions: the 2008 Global Financial Crisis and the 2020 Covid recession.)

The IMF’s most recent update projects GDP slowing, from 6.1 % in 2021, to 3.2 % in 2022 and 2.9% in 2023.  That is a momentous slowdown.  But it still leaves world growth unlikely to meet a two-negative quarters threshold.  Even by laxer criteria like 2 ½ % growth, global recession is far from inevitable.

For more information on this publication: Belfer Communications Office
For Academic Citation: Frankel, Jeffrey.Global Recession is Not Inevitable.” Views on the Economy and the World, August 28, 2022,