Last year was terrible for the global economy. By the time 2022 came to a close, observers across the world believed that several key economies would witness a recession in 2023.
But by the time the most influential policymakers, CEOs and economists met at the World Economic Forum (WEF) in Davos earlier this month, the mood had started to shift.
There is a growing sense that a global recession may not happen, and that some of the biggest economies, such as the US and the Euro-zone countries, may achieve a soft-landing.
What was the picture before WEF?
Between 2020 and 2021, governments and central banks across the world, especially in the richer developed countries, had used a loose fiscal policy (governments spending lots of money) and loose monetary policy (cheaper credit/loans) to contain the economic downturn during Covid. This policy prescription had not only set the world economy up for a period of elevated inflation, but…
