The president of the World Trade Organisation (WTO) has joined the chorus of analysts who believe that a recession is about to hit the global economy.
Ngozi Okonjo-Iweala, the director-general of the WTO, stated during a Tuesday interview in Geneva that “the indications are not looking good.” We are “edging into” a worldwide recession, according to me.
The WTO is anticipated to lower its 2022 trade growth forecasts next month. The Geneva-based trade organisation revised its previous forecast for this year’s growth in merchandise trade from 4.7% to 3% in April.
The Paris-based OECD slashed its growth projections for the Group of 20 next year, which led to the WTO’s pessimistic assessment of the world economy.
The challenges of food security and access to energy, both of which have been made worse by Russia’s invasion of Ukraine, are what Okonjo-Iweala stated she is most concerned about. Okonjo-Iweala stated, “Food security is something that really worries me. “One threat that bothers me is running out of food, Energy availability is causing.
She stated at the start of the annual public conference of the international trade organisation in Geneva that “now we have to weather what looks like an incoming recession.”
“I anticipate a global recession. That’s where I think we’re going, actually. But we also need to start making plans for the recovery. We need to restart growth.
She added that trade signs were “not looking so bright” and that both the World Bank and the International Monetary Fund had downgraded their forecasts for global growth.
Doing business as usual is not an option for us, Okonjo-Iweala concluded. “Countries are being hit simultaneously by shocks related to security, climate, energy, and food prices.”
According to the former finance and foreign minister of Nigeria, central banks are in a precarious position and have few options going forward.
The consequences for emerging markets and developing countries are pretty severe because they are also tightening and raising interest rates, she said. However, central banks don’t really have much of a choice but to do this.
“However, what happens in the developed countries affects their debt levels, the price of servicing their debts, and the amount of money that leaves and returns to those economies.
“Right now, we’re struggling to withstand what seems to be a coming recession. I anticipate a global recession. That’s where I think we’re going, actually. But we also need to start making plans for the recovery.
We must reestablish growth “declared the head of the WTO.
The former Nigerian finance and foreign minister claimed that banks were in a difficult situation as a result of most central banks adopting a hawkish stance and raising interest rates to combat inflation.
According to the head of the WTO, “Central banks really don’t have much of a choice but to tighten and increase interest rates- but the ramifications on emerging markets and developing countries are pretty severe because they too are tightening and increasing interest rates.”
She also noted that central banks needed to evaluate if high demand caused inflation or whether supply-side problems were to blame for price increases.
The head of the WTO is not the first one to issue a recession alert. In a separate research, the World Bank predicted that central banks all around the world would probably increase their policy rates in 2019.
According to this analysis, investors should expect central banks to increase interest rates for monetary policy by 2 percentage points to roughly 4%.
Faqs
The World Health Organisation (WHO), which was established in 1948, is a specialised department of the UN. In order to promote health and assist the underprivileged, the organisation links nations, partners, and communities. By achieving universal health care, WHO collaborates with its Member States to ensure the best possible level of health for everyone.
The World Health Organisation (WHO), which was established in 1948, is a specialised department of the UN. In order to promote health and assist the underprivileged, the organisation links nations, partners, and communities. By achieving universal health care, WHO collaborates with its Member States to ensure the best possible level of health for everyone.
Tedros Adhanom Ghebreyesus, who was appointed on July 1st, 2017, and reappointed on May 24th, 2022, is the current director-general.
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