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Landing economies destined for recession: the keys to why and how

 There is a big difference between the forecasts of government officials and the government about how the economy will perform this year and the next, compared to what the leaders in charge of migration are doing. wait. 

The former means that growth is weak and declining for the coming year, while the latter clearly speaks of the economic destruction process that will be achieved in the last quarter of this year and most of to do 2023. In general, managers see a strong fall for the economy and the central bank is responsible for reducing inflation by raising interest rates.


The very sharp rise of the market that has not yet reached its transformation, the power crisis of gas and oil (now confirmed with reduced production), the absence of certain restrictions or war in Ukraine seems to be a complete clean for the economy and wealth still. deflate. But in this complicated environment, some black swans are rearing their heads, such as the UK's wrong fiscal policy, the announcement of tax cuts in many economies (which pay for monetary policy prohibited) and threats arising from departmental financial activities such as. such as the crisis at Credit Suisse.


The first figure that reinforces the pessimism of experts is the global manufacturing PMI, which fell in September to 49.8 (less than 50 is a recession), a level that has not been reached since June 2020 amid the pandemic fly away. 19. According to S & P Markit, which calculates the PMI, "the manufacturing situation is accelerating in September: the sub-indices show that it will fall in the coming months, among small businesses worldwide, weak demand and weakness.


There's another factor Richard Woolnough, fund manager of M&G (Lux) Best Funds, notes as they head into the recession: variable yield indicators. "The index has a good record and shows some recession. The second warning sign corresponds to the price of oil; while this is not a recession warning for the United States, other major economies are at a great risk of recession due to the weak price they pay for crude oil; In the case of Europe, the region is also worried about the power of electricity, due to dependence on Russian gas. "Finally, he sees the weakness of the real estate market in response to these conditions.


In the near future the growth is getting stronger and prices are higher, Goldman Sachs analysts explain in a recent report about Europe that "our economists now expect GDP growth will fall 0.4% in 2023". For Joaquín Robles, XTB expert, the main thing is inflation, which is not expected to remain high for at least 12 months.

 prices are low, and even more so in countries like Spain, where the high unemployment rate puts pressure on wages. He adds: "Europe is already on the brink of recession and the data about the trade balance or industrial production in Germany is negative". In this sense, Pedro del Pozo, Director of Financial Investments of the Mutualidad de la Abogacía, says that "the financial authorities are well aware that in order to fight inflation, they must suffer the loss of, in this case, the debt will be rewarded in terms of growth. 

This is why 2023 will be a complex year for the real economy". Vincent Chaigneau, head of research at Generali Investments, also predicts a slight recession (-0.3% in 2023) for Europe, "but large simulations of the worst-case scenario for air emissions show a significant reduction that could reach 3% but is more". .