Is Recession Now Inevitable?

www.ozy.com [OZY]( OZY A Modern Media Company Share This Sh*t January 20, 2023 Share This Sh*t [The drop]( BUSINESS ROUND-UP Top economists at the World Economic Forum think recession is inevitable. Meanwhile, European worker strikes point to a global foreboding. But a new platform for African stories might offer a break in the grim forecast. Dark Economic Clouds Tatira Zwinoira from Harare, Zimbabwe [@tati_tatira]( 1 Davos Downer At the World Economic Forum (WEF) in Davos, Switzerland, major economists from the public and private sectors are largely giving a thumbs down to the state of the economy in 2023. A [chief economists’ outlook]( published by the WEF, which began its annual jamboree of the rich and powerful on Monday, suggests that two-thirds of the economists surveyed for the report predict a global recession this year, with 18% considering it “extremely” likely. The World Bank too has warned in recent days of an impending recession. “The global economy is in a precarious position,” [said]( Saadia Zahidi, WEF managing director. 2 Microsoft Cuts The fears of an imminent recession and slowing sales have already sparked a series of recent layoffs at tech giants ranging from Amazon to Salesforce. Now [Microsoft]( has joined that list, handing pink slips to 10,000 employees on Wednesday. Overall, tech layoffs [increased ten-fold]( between 2021 and 2022 as worries about an overheated economy and efforts by central banks to cool it down pushed companies into preparing for a slowdown. The fears of an imminent recession and slowing sales have already sparked a series of recent layoffs at tech giants ranging from Amazon to Salesforce. Now Microsoft has joined that list. 3 Soaring Inflation The war in Ukraine, coming on the back of the still-lingering COVID-19 pandemic, has resulted in high energy and food prices that have left multiple countries with the highest inflation they’ve seen in many years. It began in the United States when inflation surged to an [over 40-year high]( of 9.1% in June 2022. [Germany](, [France](, the [United Kingdom](, Italy, Australia and Japan are among other major economies that have seen their highest inflation in a generation or more. 4 Striking for a New Deal The rising cost of living because of spiraling inflation is also triggering major protests across Europe. French workers in public transport, schools, energy and air travel sectors went on strike this week for better working conditions. Meanwhile, the U.K. has witnessed its most widespread [labor unrest]( in many years, in which over 100,000 public sector workers from the health, transport and education industries have been demanding better pay and conditions. China’s Future Uncertain 1 Bold Pitch Speaking on the [second day]( of the WEF, China’s Vice-Premier Liu He outlined plans that he said would advance the country’s modernization over the coming five years and beyond. But for all the talk, he also conceded the reality that the world’s second-largest economy — which has grown at an average of 10% annually for the last four decades — grew by only 3% in 2022. 2 Kids Are Missing And while China’s economy is expected to grow faster with the country reopening following its strict “zero-COVID” lockdown rules, its economy might lag in the future. Earlier this week, China said its population had [dropped in 2022]( — by almost a million people. It’s the first time the world’s most-populous nation has seen a population decline since its devastating famine six decades ago. The country’s unprecedented economic successes in recent decades have been built on the back of its vast labor force. What will China do without that bedrock of growth? Unprecedented economic successes in recent decades have been built on the back of its vast labor force. What will China do without that bedrock of growth? 3 Energy Pressures Yet there are even more pressing global concerns. According to the International Energy Agency, China’s post-COVID reopening is expected to lead to [record demand for oil]( as its factories start humming again. With many nations having banned Russian crude, the overall supply of oil will likely be constrained in 2023. The result? Soaring oil prices, worsening inflation — and the economic pain all of this could bring. NOW STREAMING FROM OZY STUDIO African Story 1 Giving a Voice On a more uplifting note, [African Stream](, a Kenyan-headquartered social media-based platform that launched last week, is promising to reimagine how African stories are told, by competing against Western narratives about the continent. The firm plans to focus on African heritage and contemporary life, including but not limited to culture, history, politics, sports, commerce, music, entertainment, technology, innovation and infrastructure. A Kenyan-headquartered social media-based platform that launched last week, is promising to reimagine how African stories are told, by competing against Western narratives about the continent. The platform will rely solely on its TikTok, Instagram, Facebook, YouTube and Twitter accounts to publish the stories it produces. “Africans are innovators, entrepreneurs, leaders, revolutionaries and cultural influencers, as well as a host of other amazing things,” [said]( African Stream CEO and founder [Ahmed Kaballo](. “I want to build a platform that represents all of that with emphasis on Africa on the rise.” 2 A Ready Market Large parts of the continent — especially North Africa and Southern Africa — already see widespread social media use, so platforms like African Stream have a huge potential market. As of February 2022, 56% of Northern Africa’s population was using social media, followed by Southern Africa at 45%, according to [Statista](, which also shows that Central Africa lags far behind at 8% social media penetration. 3 The Challenge Ahead Yet even parts of the continent that are social media savvy won’t be easy markets to break into for African Stream, suggested Zimbabwe Information and Communication Technology (ZICT) chairman Jacob Mutisi. ZICT is the leading ICT advocacy group in Zimbabwe. “Existing social media companies are already recruiting Africans who are translating Western social media content into native languages,” he told OZY. “Western media have identified the economic power that Africa has.” Now African media platforms like African Stream are recognizing that power too. Will the continent give them a chance? What’s your biggest economic worry as the world slumps into a recession? 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