The International Trade Council has warned that the global economy is perilously close to falling into recession. According to the latest report from the World Bank, the global economy is predicted to grow by only 1.7% this year, a significant decrease from the 3% forecast in June. The report blames Russia’s invasion of Ukraine and the pandemic’s impact as the key factors contributing to the economic downturn. Higher interest rates pose a challenge for policymakers to overcome. The economies of the US, Eurozone, and China, which are the most influential parts of the world for economic growth, are all struggling, further worsening the problems faced by poorer countries.
The International Trade Council Secretary-General stated, “The World Bank report is a stark warning of the fragility of the global economy. The pandemic and the geopolitical conflicts have exacerbated the economic downturn that we are witnessing. The economic growth forecast is the lowest since 1991, except for the recessions of 2009 and 2020 caused by the global financial crisis and the Covid pandemic. We urge policymakers to take measures to boost investments, create jobs, tackle climate change, address the debts of poorer countries, and facilitate international trade.”
The World Bank report indicated that if a global recession were to occur, it would be the first time since the 1930s that there have been two global recessions within the same decade. It also pointed out that higher inflation is one of the main reasons for the global economy's struggles. The bank forecasts that crop prices are expected to fall by 5% this year, while energy prices are expected to fall as global production increases, but inflation will still remain well above the 2% rate considered healthy. The report recommends measures to address the cost of living, investments, and job creation to help ease the global economic downturn.