The first quarter of the year 2023 is likely to have a negative GDP growth rate.
According to the conference board, there is a 96% chance of a recession occurring in the next 12 months in the US.
The CEO and the chairman of Goldman Sachs, David Solomen, said that the US economy can enter into recession in the second quarter of the year 2023. However, other economists contradicted his statement by stating that the recession may be mild and will cause minimal effects on the economies of the world.
If you are interested to know more about the latest facts and figures related to the recession, you surely are in the right place. In the following article, we have compiled crucial statistics related to the recession and its effect on the world’s GDP and economy.
Recession Statistics At A Glance
- The recession grew to 30% in April 2022 and grew to 50% in the month of May 2022.
- In the year 2023, the global economic growth rate is expected to be 2.7%.
- The projected growth of the US economy in the year 2023 is 1.0%. While in the year 2022, it was 1.6%.
- The unemployment rate due to inflation has increased to 3.7%.
- Economists have advised the citizens of the United States to track and increase their savings for the year 2022.
- Over the past 30 years, US economy was in recession only 8% of the time.
- The last recession occurred during the Covid-19 pandemic between February 2020 and April 2020.
- The Great Recession started in December 2007 and lasted till June 2009. The effect of the recession wasn’t as severe as the pandemic recession.
- Emerging and developing Asia is projected to have a growth rate of 4.9%, while the Middle East and Central Asia are expected to have an economic growth rate of 3.6%.
- The European area will have an economic growth rate of only 0.5% in the year 2023.
- Developing economies and emerging markets are expected to have a growth rate of 3.7% in the year 2023.
- The advanced economies will grow at a predicted rate of 1.1% in the year 2023.
- The government can prepare for a recession by implementing some changes in capital policies. This will prevent the nation’s GDP from being affected critically by inflation.
General Recession Statistics
Economists are expecting a Recession in the year 2023. Let us take a look at at few of the stats that will help us know more about the hovering calamity of recession.
- There is a 96% likelihood of a recession taking place in the US.
- The last quarter of the year 2022 and the first quarter of the year 2023 are more likely to produce a negative impact on the growth of the GDP.
- The recession decreased to approximately zero and recovered from the recession between September 2020 and March 2022.
- The recession rose to 30% in the month of April 2022.
- The recession rose to 50% in the month of May 2022.
- The economy grew by 2.9% in the third quarter of the year 2022.
- The Federal Reserve continues to increase interest rates, addressing the concern that recession may be unavoidable.
- The economists predicted that the GDP is estimated to grow by 4% or, at minimum, by 1% in the fourth quarter of the year 2022.
- There was a 1.6% drop in the nation’s GDP in the first quarter of the year 2022, while there was a 0.9 percent drop in the second quarter of the year 2022.
- The median probability of the recession over the next 12 months is 47.5%.
- Us economy was in recession just 8% of the time in the past 30 years.
- The economy reported a growth of 2.9% in the third quarter of the year 2022.
- In the fourth quarter of the year 2022, economists expected the GDP to show further positive growth. The estimates are a maximum increase of 4% in the GDP to a minimum increase of 1%.
- As recorded in August 2022, there was an 8.2% of inflation in the United States.
The following table displays the rate of inflation around the world and in different countries of the world.
What Is A Recession?
A recession is a temporary economic decline that leads to reduced trade and industrial activity. It is identified by the fall in GDP in two successive quarters.
According to Wikipedia, In the United States, a recession is defined to be an influential drop in economic activity that lasts more than a few months. The effects of the recession are generally visible in real GDP, employment, industrial production, real income and wholesale-retail sales.
The Key Indicators Of Recession
As stated above, the best technique to identify a recession is experiencing two consecutive quarters with negative GDP. Hence the GDP in the first and the second quarter of the year 2022 led to a belief that the US is now in recession.
Percentage Change Of Economic Indicators
The following table shows the percentage change in economic indicators during recessions.
|Indicator||Prior to Recession||Two Subsequent Quarters||Entire Recession||Quarter 2, 2022|
|Real personal income||0.62%||-0.83%||-1.52%||0.24%|
|Real personal consumption||0.48%||-2.92%||-3.72%||0.26%|
Source: FRED(Federal Reserve Economic Data)
The Latest Projections Of The Economy
- Global growth is expected to slow from 3.2 percent in the year 2022 to 2.7 percent in the year 2023.
- Global inflation rose to 8.8% in the year 2022, but it is expected to decline to 6.5% in the year 2023. In the year 2024, it may further decline to 4.1%.
- The following table displays the growth projections in various economies.
|Year||Percentage of Global Economy Growth Rate|
- In the year 2023, the growth rate of advanced economies is projected to be at a rate of 1.1%.
The Following Table Displays The Growth Rate Of Advanced Economies
|Year||Percentage of Advanced Economy Growth Rate|
- Emerging markets and developing economies are expected to grow at a rate of 3.7%.
The following table displays the growth rate of developing economies and emerging markets over the past few years.
|Year||Percentage of Developing Economies and Emerging Markets Growth Rate|
- The global economy of the United States has a projected growth rate of 1.0% in the year 2023.
- The European economy is expected to have a growth rate of 0.5% in 2023.
- 1.7% of the growth will be observed in Latin America and the Caribbean region in 2023.
The following table displays the growth projections of the economies in different regions.
|Middle east and central Asia||4.5%||5.0%||3.6%|
|Emerging and developing Asia||7.2%||4.4%||4.9%|
|Latin America and the Caribbean||6.9%||3.5%||1.7%|
The Effect Of The Recession On Various Sectors
Many sectors and industries are severely affected by the storm of inflation. The recession has paved the way for the increase in the rate of inflation. Let us take a look at some sectors that are at high risk of being affected by the recession.
- Consumer Spending.
Consumer spending decreases subsequently due to the rise in inflation. The consumers will try to stack up their savings.
There is also a probability that consumer savings and a decrease in the purchase of goods may further lead to the decline of the economy.
- Business Investment
To prepare for a recession, businesses may stop investing in unnecessary sectors or may decrease their investments.
The ventures are at high risk of declined financial backups. Furthermore, some investors may revoke the financial support provided to the companies that yielded decreased profit rates.
- Foreign Trade
Recession may immensely affect foreign trade. There may be a decline in foreign trade in the year 2023 due to the decline in the GDPs of the economies.
We can anticipate no effect on foreign trade if the recession remains mild.
The housing sector can be affected due to the rise in inflation. There may be a decline in the purchase rates of houses as consumers will shift their focus on saving their capital.
- Government Policy
There might be some changes in government policy for trading, import, export and other sectors that play a major role in expanding the GDP of the nations.
The government may also take some strict actions on the management of the capital flow of the nation. The finances will be controlled, and the focus of the government will shift to increasing the economy of the nation.
The unemployment rate increased by 3.7%. There may be an increase in these figures. Organizations may fire or give a break to some of the employees due to increased rates of inflation.
On the other hand, some companies increased the payroll of employees by 315,000 in the month of September. Also, there was an opening for 261,000 jobs in October 2022. These companies followed the theory of keeping the business stable by maximizing employees and work.
When Was The Last Recession?
According to NBER(National Bureau of Economic Research), the last recession took place between February 2020 and April 2020. The GDP of the countries was severely affected due to the Covid-19 pandemic. The covid recession was very severe and bought a toll on the world economy.
Prior to that economy declined between December 2007 and June 2009. The phase was known as the Great Recession. The recession, however, wasn’t as severe as the covid recession but lasted longer.
In the year 2020, the economy had already started to grow by May 2020. The growth of the GDP was due to the loosening of restrictions, unprecedented direct payments, and unemployment insurance.
How Can We Prepare For A Recession?
The fear of an upcoming recession may hover over many citizens, but there are still some ways to overcome the calamity.
Economic experts advised people to keep some money aside. These savings will back them up during the recession period. They further said that reducing spending on unnecessary products may decrease the effect of inflation on the citizens.
The well-known economist Sham reported that the recession in the year 2023 would probably be mild. He further added that people should not panic and try to increase their savings.
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Wrapping Up: Recession Statistics (2023)
That’s all about the Recession Statistics.
Economists have an opinion that the recession won’t be much severe. Common people are advised to save and prepare for the recession.
However, some economists exhibited the fear that if not taken seriously, the recession could lead to serious financial calamities.
The experts are still studying and finding the answers to the theories of recession with the help of recent trends in economic growth.
Will the recession destroy the economy of the world? Or will there be just a mild recession that would be easy to cope with?
We can just wait and prepare for the recession to find out the answers to the economic decline of the world.