“Recession Risks Threaten US Economy in 2023: Signs and Tips to Cope”

05:04 PM

Monday, May 22, 2023

Cairo- Masrawy:

Recession risks still threaten the US economy during the current year, with economists expecting it to occur in the second half of 2023, which may have repercussions on the global economy, including emerging markets.

According to a previous CNN report, JPMorgan CEO Jamie Dimon warned last Thursday of a major economic risk lurking on the horizon. He told Bloomberg News that given the risks ahead, “I would happily accept a moderate recession.”

Billionaire investor Stan Druckenmiller made no secret of his words at the Sohn Investment Conference this month. He warned that a hard landing was coming, and said it was “naive not to be open to something really bad happening.”

This comes in light of the rise in interest rates after the successive hikes of the US Federal Reserve and thus the high cost of financing, in addition to the risk of the possibility of the US defaulting on its debts if no agreement is reached there to raise the US debt ceiling.

signs of recession

Hany Tawfik, an Egyptian economist, said on his Facebook account yesterday that there are several signs of recession that can be explained to non-specialists as follows:

1- A continuous slowdown in the rate of economic growth.

2- Decreased buying and selling activity.

3- Decrease in corporate profits and share prices.

4- People lose their jobs and find new employment opportunities difficult.

5- Decrease in the money supply in society, accompanied by poor access to finance.

6- The difficulty of liquefying real estate (i.e. selling it easily).

Tips for coping with a recession

Hani Tawfik gave advice to confront recession in the event of its occurrence, especially if at least some of its features began to appear, including the following:

1- Hold on to your job as much as possible, and even try to get additional work.

2- Arrange your financial priorities, and postpone the purchase of non-necessities.

3- Reduce your level of borrowing as much as possible.

4- The type of your savings, if any.

5- Defer your investment decisions, whether direct or indirect (the Stock Exchange), and stick to the presence of gold in your portfolio, as its price rises with crises as a safe haven.

6- Avoid real estate investment unless it is a long-term investment due to the difficulty of liquefaction at the time of recession.

7- Hurry up to pay off your loans and interest rate obligations, because there is always the possibility of a recession turning into an inflationary stagnation accompanied by a higher cost of debt servicing.