The world economy is experiencing one of the worst years in three decades as energy turmoil caused by the war in Ukraine continues to take its toll, Bloomberg Economics reported.

In a new analysis, economist Scott Johnson predicts growth of just 2.4 percent in 2023. That's down from an estimated 3.2 percent this year and the lowest level since 1993, not counting the crisis years of 2009 and 2020.

Nevertheless, the headline figure probably hides a divergence of fortunes: the euro zone will start 2023 in recession, while the U.S. will end the year in recession. In contrast, China is projected to grow by more than 5%, thanks to a faster-than-expected end to its zero-tolerance Covid strategy and support for the crisis-hit real estate market.

In the U.S., where wage growth is designed to keep inflation above the target level, we believe the Fed is moving toward a final rate of 5% and will remain at that level through Q1 2024. Meanwhile, in the eurozone, a faster decline in inflation will mean a lower final rate and the possibility of a rate cut at the end of 2023.

In China, where authorities are torn between a desire to support the recovery and fears about currency weakness, a limited rate cut is looming.