IMF head warns of ‘biggest test since second world war’
Kristalina Georgieva says Ukraine conflict is ‘devastating lives, dragging down growth and pushing up inflation’ Gloom has descended on financial markets in recent months. Many analysts, business people and politicians think the resilience displayed in much of the economic data so far cannot last. A survey of chief economists of companies and international organisations undertaken by the WEF found that all had become more pessimistic over the past six months and now expected “moderate” economic activity in the US, China and most emerging economies. A “weak” outlook closer to the war in Ukraine in Europe was forecast. Inflation would be high everywhere outside Asia, with real wages falling amid rising food insecurity and higher energy prices. The impact of global supply chain disruptions and higher interest rates had also been exacerbated by the war, raising fears that the global economic recovery from coronavirus was about to stall. Increasing numbers of economists have become alarmed that the world is sliding towards a recession. Chinese production has plunged as Beijing tries to contain coronavirus through lockdowns, Europe is suffering from a cost of living crisis, the US risks moving from boom to bust and emerging markets face food shortages.
Speaking on a panel at the forum, Robert Habeck, Germany’s vice-chancellor and economy minister, said: “I’m really afraid that we are running into a global recession, with a tremendous effect not only on [the climate], but on global stability.”
Jane Fraser, chief executive of Citi, said there would be a recession in Europe and a downturn in the rest of the world. It’s a question of “Russia, recession and rates” all damaging activity, she added. Georgieva said the horizon had “darkened” since the IMF made its forecast of 3.6 per cent growth for 2022 in April. The consequences of Russia’s invasion were being seen “far and fast, with tightening financial conditions, US dollar appreciation and China slowing down”. “It’s going to be a tough year,” she said, with recession in some countries likely but not the average for the whole world. NN: best of times the worst of times. We had the greatest peace and property the wold has ever seen. With wide open borders allowing the free flowing of goods and most people on the planet. World hungers WAS at the lowest level ever and the most people in human history were lifted from poverty. That party is over. Its a mindless rush to starvation, oppression and poverty. A fine China hand painted ceramic tea pot is hard to make and easy to break