A recession is likely to replace inflation as the driver of the global economy this year, meaning that investors will face more uncertainty about what might happen, according to leading economist Mohamed El-Erian.

Markets are bracing for an inevitable economic downturn after a flood of warnings from Wall Street analysts, while the International Monetary Fund has said it expects a recession to hit one-third of the world this year.

This will lead to unpredictability for investors.  It tends to cause a lot of turbulence in the market.

Tracking inflation has been a focus for investors in 2022, as central banks have tightened monetary policy to slow the pace of price increases. In the U.S., the Federal Reserve acted aggressively, raising interest rates at the fastest pace in its history, and all three major U.S. stock indexes experienced their worst year since 2008.

But now analysts and investors are increasingly convinced that tighter central bank action will lead the U.S. into recession, and Bank of America, like other major Wall Street banks, has warned that a downturn could cause stocks to fall by more than 20 percent.

El-Erian, who has previously criticized the Fed for its slowness in taking action, said the rate hike came too late to stop inflationary pressures from spreading to wages and services. Thus, inflation is likely to remain around 4 percent, be less sensitive to interest rate policy and expose the economy to a higher risk of accidents caused by additional policy mistakes undermining growth, he said.

The economist cautioned against excessive complacency about the forces behind the coming economic downturn. The uncertainty facing each of these three economic areas suggests that analysts should be more cautious in assuring us that recessionary pressures will be 'short-lived and shallow, El-Erian said.