World Bank President David Malpass said the global economy could end up in a recession next year. According to him, there is a danger and a “real danger” of this happening. He points out that many economic problems are currently converging.
For example, according to Malpass, economic growth is already decelerating in the industrialized countries of Europe. In addition, the devaluation of the currency, due to the appreciation of the dollar, causes problems in low-income countries. The mountain of debt is now rising. Those countries also have to deal with rising interest rates, while inflation is a major problem for all countries, but the poor in particular.
Kristalina Georgieva, head of the International Monetary Fund, added that growth is slowing in all major economic regions of the world. She pointed to the high energy prices that are weighing on the eurozone economy, as well as the outbreak of the Corona virus in China, which continues to cause problems in the supply chain. In the US, the labor market continues to perform strongly, but the growth in the number of jobs is slowing down due to the rise in interest rates by the US central bank.
The International Monetary Fund will release new forecasts for the global economy on Tuesday. Georgieva said growth forecasts would be revised downward. The coronavirus pandemic, the Russian invasion of Ukraine and climate disasters on all continents are causing problems.
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