Are we heading for a global recession and if so how concerned should we be?
The IMF forecasts global growth in 2022 at 4.4%, but these projections are being revised downwards due to conflict and the fallout from sanctions. The Global Economic Outlook session at Davos 2022 brought together leaders to discuss the key issues facing the global economy, including the prospect of recession. And that's where we begin the full briefings of undaunted tonight. As always I will be processing the news this evening with Co-Anchor Star Smart, how are you doing today Star? I must hasten to say The markets are bearish, economies of continents and countries are at the brink of a recession, the west may just be losing all creativity to provide a solution.
As Russia expands its rage to the east Ukraine begs for weapons. The Global Economic Outlook panel discussion on Monday 23 May opened with the question on everyone’s lips: are we heading for a global recession and if so how concerned should we be? Horizon has darkened with the prospect of another global recession
Kristalina Georgieva, Managing Director of the International Monetary Fund, opened with a cautious note, explaining that since the IMF’s latest forecasts the “horizon has darkened.” She was particularly concerned about food price shocks and how anxiety around the world over accessing affordable food was “hitting the roof.” Georgieva went on to point out that stalling action on the climate crisis and the slump in digital money assets was further darkening the outlook. Rubenstein ended the session on a positive note, saying he doesn’t believe the current economic crisis will be anything like previous shocks over the last 25 years – the dot.com bubble, the financial crisis or the pandemic. Again reiterating, “It'll be a mild banana, if there's a banana.”
A focus on long-term resilience and strong government policies to tackle climate change and healthcare (to prepare for future pandemics) were the key messages from Fraser. Furthermore, the world’s response to Ukraine and the pandemic have solidified Villeroy de Galhau’s strong conviction that democracy works. Ending on a salutary note, Georgieva reminded us that the world has dealt with unthinkable crisis after unthinkable crisis and yet we remain resilient. The next chapter must focus on building resilient people – backed up by education, health and social protection. Does democracy really work during such critical times?
Fed GDP tracker shows the World's economy could be on the brink of a recession The U.S. trade deficit with its global partners fell to $87.1 billion in April — still a large number by historical standards but down more than $20 billion from March's record. On net, trade is expected to subtract 0.13 percentage point from GDP in the second quarter, from a previous estimate of -0.25 percentage point, according to the Atlanta Fed. Talk of recession has accelerated this year amid surging inflation that has put a damper on corporate profit outlooks. Many on Wall Street are still expecting the combination of resilience in consumer spending and job growth to keep the U.S. out of recession. One major source of inflation fears is the Federal Reserve, which is on a rate-hiking cycle in an effort to quell runaway inflation. Chair Jerome Powell said last month he sees "a good chance to have a soft or softish landing," even with policy tightening.
"It's not going to be easy. And it may well depend, of course, on events that are not under our control. But our job is to use our tools to try to achieve that outcome, and that's what we're going to do," Powell said. Earlier Tuesday, Treasury Secretary Janet Yellen told a Senate panel that "bringing inflation down should be our No. 1 priority" and noted that attempts to bring down the cost of living are coming "from a position of strength" in the economy. As the world suffers inflation and possible economic brink, power mongering doesn't seem to seize. The West versus Russia: if you think you have seen anything. There's more to come.
