The normalization of the global economy situation is likely to occur in the next 18-24 months as per Dr. Osman Cevdet Akcay, a senior economist at the opening ceremony of the Kallanish Flat Steel conference held in Istanbul this week.
The global economy is currently heavily impacted by the rise in inflation, however the most recent decision by the US Federal Reserve to tackle inflation, even at the expense of drastically slowing down the pace of economic development (or even triggering the possibility of a recession) is being embraced by policymakers across the world and is anticipated to bring positive results in 2024. Similar to the European Central Bank authorities are trying to curb inflation, even as a recession is looming.
Dr. Cevdet believes this opinion for deflation in the face of growth in the economy will benefit the economy. Recent forecasts suggest the highest levels of inflation in 2022. However, an improvement in inflation is likely to already be realized by 2023 (excluding China).
He also said that for the advanced economies, the period between 2022 and 2023 will be extremely bumpy, however there is a chance of normalization. He also said that certain nations like India will experience a smoother experience in the coming months, and so will the countries of the Asia-5.
“The Fed and the ECB are determined to reduce and limit inflation at all costs, but the market seems to have recognized that we have to be in recession for a while to decrease. But I’m still quite optimistic for a gradual return to normalization over between 18 and 24 months. If a cease-fire is reached by Russia as well as Ukraine I may even be extremely optimistic,” Dr Cevdet noted.
On the exchange rate front on the exchange rate side, Dr. Cevdet stated that “I would place my bets on the dollar’s strength.“