Sri Lanka, in the midst of its worst economic crisis on record, has an 85% chance of sliding into recession next year, up from a 33% chance in the previous survey – by far the highest increase in the region. Economists also raised their expectations for recessions in New Zealand, Taiwan, Australia and the Philippines to 33%, 20%, 20% and 8% respectively. Central banks in these places have raised interest rates to tame inflation.
The probability of a recession for several other Asian economies remained unchanged in the survey. Economists see a 20% chance that China will enter a recession and a 25% chance that either South Korea or Japan will enter a recession.
Asian economies have remained broadly resilient compared to Europe and the United States.
Rising energy prices have hit countries like Germany and France hardest, with a spillover effect affecting the rest of that region, said Steven Cochrane, chief economist for Asia-Pacific at Moody’s Analytics Inc.
In general, the risk of recession in Asia is around 20-25%, he said, adding that the US has a 40% chance of entering a recession, while Europe is 50-55%.
The Bloomberg Economics model puts the probability of a US recession within the next 12 months at 38%, up from around 0% a few months earlier. This model takes into account a variety of factors ranging from housing permits and consumer survey data to the gap between 10-year and 3-month Treasury yields.
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