Updated: Sep 7
World Bank's boss warns about the upcoming world economic situation
It has been a while since I updated my last blog. From this week, I will be posting weekly again :)
Recently, BBC's newly released article "Ukraine war: World Bank boss warns over global recession" caught my eyes. Today, based on my knowledge and research, I would like to summarise the article about the predicted global recession in detail since it is not just a problem for an individual in society but for all of us.
I will be explaining this topic through 3 significant factors:
Ambiguity & Difficulties of prevention
Crucial news & facts
Awareness towards the prediction of global recession:
First of all, the idea of a predicted global recession became widespread because World Bank president David Malpass mentioned it at an event hosted by the US Chamber of Commerce. It is understood that the war in Ukraine and its impact on food and energy prices will trigger a global recession. Many worldwide countries have already gotten negative economic outcomes due to imposing economic sanctions on Russia.
The ambiguity & difficulties of avoiding recession:
Malpass did not give a specific forecast on how deep a recession might be: 'As we look at global GDP, it’s hard right now to see how we avoid a recession,' 'The idea of energy prices doubling is enough to trigger a recession by itself.'
Crucial news & facts regarding the global recession:
While the World Bank boss described the threats of the upcoming global recession at the event recently, the World Bank also cut its GDP (Gross Domestic Product) forecast for this year by almost a full percentage point to 3.2%. This proves how the World Bank is predicting a huge decrease in the global economy this year.
Many worldwide countries, especially those in Europe, are still too dependent on Russia for oil and gas. Therefore, they need to become economically dependent and rely less on Russian energy.
The substantial slowdown of the economy is everywhere (ex. US is facing 3 times higher gas prices due to its high demands; a similar situation is also occurring in Germany, the biggest economy in Europe and the 4th largest in the world.)
Shortages of fertilizer, food, and energy sources negatively affect developing countries.
A long-lasting lockdown in China's major cities (ex. Shanghai; one of the biggest financial and shipping hubs in China) will result in economic deterioration.
Although we cannot fully predict how our world economy will be in the future, it is almost certain that we will not be able to enter a better society - all these factors above add up to cause a global recession.