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

“There won’t be” yet a “sudden stagflation,” said Simon Baptiste, chief global economist at the Economist Intelligence Unit, referring to a sudden stagnation after a period of stagflation.

With the war in Ukraine and pandemic unrest continuing to wreak havoc on supply chains, stagflation — characterized by low growth and high inflation — will continue “for at least the next 12 months,” Baptiste told CNBC last week.

“Commodity prices will start to fall from next quarter, but they will remain permanently higher than they were before the war in Ukraine for the simple reason that Russian supplies of many basic commodities will be permanently reduced,” he added.

The pandemic as well as the war in Ukraine has choked the supply of goods and merchandise and upended efficient distribution through global supply chains, driving up prices for everyday goods such as fuel and food.

But while higher prices will cause pain to families, growth in many parts of the world, while slow, is still sluggish and labor markets have not collapsed.

Unemployment levels in many economies are at their lowest levels in decades.

So consumers – while wary of a repeat of the last global recession caused by the subprime mortgage crisis in the US more than 10 years ago – need not start preparing for a recession.

“For nearly all of Asia’s economies, a recession is unlikely, if we’re talking about consecutive periods of negative GDP,” Baptiste told CNBC’s Street Signs Thursday.

The economist said that even if the global economy is at risk of recession, many consumers have ample savings and are hoarding of household durables.

“To some extent, one wouldn’t feel as bad as the spot numbers,” he said.

Shane Oliver, chief economist at AMP Capital, doesn’t see a recession writing on the wall either, at least not for another 18 months.

“Yield curves or the gap between long-term bond yields and short-term rates have not decisively reversed or warned of a recession, and even if they did now, the average leading to a recession is 18 months,” he said in a note.

He believes that a deep bear market in the US and Australia can be avoided.

At the same time, central banks around the world are tightening interest rates to combat inflation.

The US central bank announced its largest interest rate increase in more than 22 years earlier this month, raised the benchmark interest rate by half a percentage point, and warned of further rate increases.

The minutes of the Federal Reserve meeting were released on Wednesday He indicated that officials were willing to go ahead with multiple interest rate increases of 50 basis points, while trying to bring down inflation.

Last week, the Reserve Bank of New Zealand, which has been tightening more than other central banks, raised the cash rate by another half a percentage point to 2%. was the central bank He raised the interest rate the fifth in a row, and indicated that the cash rate will reach its peak at a higher level than previous expectations.

The rate is now up 1.75 percentage points since the tightening cycle began in October.

Governor Adrian Orr said: “We are very committed to making sure that the actual rate of inflation returns to the target range of 1 to 3% and at 6.9%, we are very far from that … We are resolute in our determination to contain inflation.” .

But economists say there is always a risk that controlling inflation will trigger a recession.

It is known that stagflation is difficult to control as curbing high prices by raising interest rates may lead to lower growth.

“The longer inflation stays high, the more investment markets fear that central banks will not be able to tame it without causing a recession,” Oliver said. “And as Fed Chair Powell has pointed out, raising inflation to 2% would involve some pain.”

But not everyone is concerned.

Vicki Redwood, chief economic adviser at Capital Economics, said she was confident central banks would be able to bring down inflation without planning for a recession.

Redwood said that planned price increases in many places – such as Europe, the UK and the US – should be enough to bring inflation back to target.

“[But] “If inflation and inflation expectations prove more solid than we expect, and interest rates need to rise further as a result, a recession is likely to be on paper,” she said in a note.

She added that a Volcker shock-style recession may be justified.

The Volcker shock occurred when Federal Reserve Chairman Paul Volcker raised interest rates to the highest point in history in the 1980s, in an attempt to end double-digit inflation in the United States.