Daily Management Review

Economists warn of global recession risk from COVID-19 in China and war in Ukraine


The world economy is threatened by a recession, experts from the international Institute of International Finance have warned. They also sharply lowered its growth forecast. Among the reasons are the situation around Ukraine and consequences of the COVID-19 outbreaks in China.

Economists of the International Institute of International Finance have warned of a possible global recession and sharply reduced the growth forecasts of the world economy. Among the reasons they call the situation around Ukraine and the pandemic COVID-19 in China.

The picture of global economic growth, which has already been shaken by Russia's invasion into Ukraine and coronavirus outbreaks in China, could be further destabilised by a rapid tightening of financial conditions in the US, the experts explain. "Given these factors, we are sharply lowering our growth forecast for 2022," they conclude.

Experts compared the current rise in US real long-term interest rates to the period of panic in financial markets in 2013, triggered by the Fed's announcement of a gradual winding down of its quantitative easing programme. Although "global growth rates are virtually unchanged" and remain low, the weakest parts of the global economy are considered to be Russia and Ukraine, "where GDP is literally collapsing", the statement said.

source: iif.com