The global recession is still expected in early 2023 despite recently released data showing an easing of price increases, according to a report released Tuesday by real estate and investment firm CBRE.
The US, the UK, and EU central banks have announced aggressive interest rate hikes in recent months to combat soaring inflation. However, despite the increase in interest rates, inflation will continue to squeeze consumers in the months ahead, the CBRE report added. However, the outlook for the Asia-Pacific region is “considerably brighter” than the rest of the world.
The cooler-than-expected US inflation data released last week fueled hopes that the cost of living crisis may have peaked and that the future increases in rate hikes by the US Federal Reserve could be smaller.
In June, the Federal Reserve raised the benchmark borrowing rate by 0.75 percentage points, its biggest rate hike since 1994. Interest rates were increased by the same 75 basis points for three more consecutive months, with an additional 50-basis-point hike expected in December and more in the first half of next year. Further rate hikes are expected in the UK, EU, and Asia Pacific, excluding China and Japan.
The rate hikes will cause economic activity to slow further and heighten the risk of financial market volatility, added CBRE.
