Gold is backed up! Experts deny that the global economy is in recession, and affirm that the current high prices and low growth

Economists say a global recession is not imminent, but prepare for higher costs and slower economic growth .

"There will be no sudden stagflation 'after'," said Simon Baptist, global chief economist at the Economist Intelligence Unit, referring to a surprise recession that follows a period of stagflation.

He said last week that stagflation, marked by low growth and high inflation, would persist for at least the next 12 months as the Ukrainian war and outbreak disruptions continue to wreak havoc on supply chains.

He added: "Commodity prices will start to fall back in the next quarter, but will remain permanently higher than they were before the Ukrainian war for the simple reason that Russia's supply of many commodities will be permanently reduced."

The pandemic and the war in Ukraine have suppressed the supply of commodities and commodities, disrupted the efficient distribution of global supply chains, and forced higher prices for everyday commodities such as fuel and food.



But despite the pain for households from higher prices, economic growth in many parts of the world is slow, but still, and the job market isn't collapsing.

Unemployment in many economies has reached its lowest level in decades.

So consumers, while worried about a repeat of the last global recession triggered by the U.S. subprime mortgage crisis more than a decade ago, don’t have to start preparing for one.

"For almost all Asian economies, if we're talking about consecutive quarters of negative GDP growth, the chances of a recession are pretty slim ," he said on Thursday.

Even with the global economy at risk of a recession, many consumers still have ample savings and are stocking up on durable household goods, the economist said. "So in a way, it doesn't feel as bad as the data at the moment looks ," he said.

AMP Capital chief economist Shane Oliver also doesn't think a recession is imminent, at least not for the next 18 months .

"There has not yet been a decisive inversion or recession warning in the yield curve or the gap between long-term Treasury yields and short-term Treasury yields, and even if they do, the average recession is 18 months," he said in the report.

In the U.S. and Australia, he believes, a deep bear market can be avoided .

Meanwhile, central banks around the world are tightening interest rates to fight inflation. The Fed earlier this month announced its biggest rate hike in more than 22 years, raising its benchmark rate by 0.5 percentage point and warning of further hikes. The minutes of the Fed meeting released on Wednesday showed officials were preparing to raise interest rates by 50 basis points multiple times in an attempt to reduce inflation.

Experts deny that the global economy is in recession, confirm high prices and low growth, and there is still a risk aversion in the market, which will give gold some support.


Spot Gold Daily Chart

At 13:30 on May 31, GMT+8, spot gold was quoted at $1,852.80 per ounce.