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Published on Monday, October 3, 2022

Global | A mild recession

The recession facing Europe and the United States, if not more countries, over the coming quarters is likely to be a quieter affair than other, deeper recessions seen in recent times. Ultimately, the current distortions within the economy are not as significant as in previous crises.

Key points

  • Key points:
  • The recession looming on the horizon will, to some extent, be sought by central banks, which will raise interest rates to stifle persistent inflationary pressures and thus avoid even more negative economic scenarios.
  • Another key feature of the impending recession is that we can see it coming. In other words, it won’t catch us by surprise, as did the recession stemming from the coronavirus, or the crisis triggered by the collapse of Lehman Brothers in 2008 and the euro crisis in the past decade.
  • Current economic and financial distortions are not as significant as in previous crises and, notably, corporate, bank and household balance sheets are now healthier than they were.
  • Moreover, and in contrast to the COVID-19 crisis, this time we are dealing with a known “disease” and one for which we already have “vaccines”, although there is no guarantee that they will be administered properly and will not cause any side effects.

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