Source: Global Times
[Global Times Comprehensive Report] "Global economic activities are experiencing a wider and more severe slowdown than expected, and inflation has reached its highest level in decades." On the 11th local time, International Monetary Fund (IMF) released the latest issue of the " World Economic Outlook Report ", saying that in 2021, global economic growth is expected to be 6%, slowed to 3.2% in 2022, and further shrank to 2.7% in 2023. "The worst situation is still coming. For many people, 2023 will be a (economic) recession." Before this, international institutions such as United Nations Conference on Trade and Development , World Bank , etc. have successively issued warnings on the prospect of a "world economic recession". The British " Financial Times " described that it is now a "hard time for global policy makers." Experts interviewed by " Global Times " on the 11th said that in the face of multiple crises, it is more important to strengthen policy coordination and cooperation among major economies. They reminded some Western countries not to put their own interests and geopolitics before global development.
US media: The world economy is heading for "stormy waves"
" New York Times " said on the 11th that the world economy is heading for "stormy waves". Compared with the report released in July, the IMF's expectations for global economic growth this year remained at 3.2%, while the expectations for next year were lowered from 2.9% to 2.7%. The agency said that except for the 2008 financial crisis and the worst of the COVID-19 pandemic, the current global economic growth situation is "the weakest since 2001." Global inflation is expected to reach 8.8% in 2022 and will drop to 6.5% next year. The US CNBC website said on the 11th that the IMF emphasized that the risk of "imbalance" of monetary, fiscal or financial policies has "rather rising sharply."
According to AFP html on the 311th, the IMF lowered its growth forecast for the United States this year to 1.6% from the previous 2.3% and 3.2% in China. According to forecasts, Germany and Italy will fall into recession next year, leading the way to become a developed economy with economic contraction after the Russian-Ukrainian conflict.
In the foreword to this issue of the World Economic Outlook Report, the IMF also wrote that the external environment is already very challenging for many emerging markets and developing economies. The sharp appreciation of the US dollar has greatly exacerbated the domestic price pressure and cost of living crisis in these countries. Many low-income and developing economies are still in debt difficulties. "The impact of 2022 will re-tear open the economic wounds that have only partially healed after the epidemic."
html From 10 to 16, the IMF and the World Bank's fall annual meeting was held in Washington, DC. According to Reuters , at the beginning of the dialogue with IMF President Georgieva on the 10th, World Bank President Malpass said that the global economy is facing "real danger" of recession next year. He said that currency depreciation means that debt levels are "heavyer" to developing countries .According to IMF estimates, about one-third of the global economy will shrink in at least two consecutive quarters this year and next year, and by 2026, global output may lose as much as $4 trillion. Georgieva previously compared the analogy that this "serious setback" is roughly equivalent to the size of Germany's economy. She said on the 10th that the economic activities of the three major economies of the United States, China, and EU are all slowing down. Among them, the U.S. rate hike of "started to have adverse effects", and the EU economy is being hit by the soaring price of natural gas .
Georgieva also said that the IMF will call on central banks this week to continue to work hard to deal with inflation, and if they don’t do enough, “we are in trouble…we can’t let inflation become an out of control train.”
German " Dingjing " weekly said on the 11th that the truly major economic crisis scenario is now on the desktop. Finance ministers from all over the world, central banks, bankers and experts gathered in Washington. The core problem they face is how to avoid the worst-case scenario - it is an "end" that includes out-of-control inflation, stock market crashes, and famine crisis, social unrest and other international conflicts that shake the world.
Will the United States fall into recession within 6 to 9 months?
In the past month, many international institutions have repeatedly warned that the global economy has become increasingly risky of recession. Qatar Al Jazeera reported on the 10th that last week, the United Nations Conference on Trade and Development issued a "terrible warning" - the monetary and fiscal policies of developed economies may push the world toward a global recession and long-term stagnation, and the damage caused may be more serious than during the 2008 financial crisis and the 2020 COVID-19 epidemic. The agency's report believes that any idea of looking to lower prices through higher interest rates without creating a recession is "reckless gambling."
World Trade Organization recently released a report saying that next year, the total global trade in goods may only increase by 1%, far lower than the previous forecast of 3.4%. "The indicators don't look good." In an interview at the end of September, WTO Director-General Ngozi Okonjo-Ivera said that she believes the world is gradually entering a global recession.
As for major economies in the world, the Brookings Institution in the United States published an article on the 9th saying that the US economy is full of conflicting signals: consumer demand remains strong and employment is growing at a fairly healthy rate, but at the same time, GDP growth is weak, and no matter what the standard is measured, inflation is still at a high level, which makes Feder only further rate hikes, although the strengthening of the dollar and the falling value of financial assets have led to a tightening of the financial environment.
According to the US CNBC website, JPMorgan CEO Jamie Dimon 10 said that a "very, very serious" headwind may drag the United States into recession within 6 to 9 months. He said he could not determine how long the US recession would last. The only thing he could be sure of is the continued turmoil in the market, which may be accompanied by disorder in the financial market.
Kozo Wright, director of the Globalization Department of the United Nations Conference on Trade and Development, told Qatar Al Jazeera, "If the financial crisis in the United States is triggered, the downward trend will be infinite. When the United States finds more political will to bail out, it will eventually have policy space to support its economy and financial system. But most countries in the world, especially the southern countries, do not have real safety nets."
Al Jazeera quoted Edward Moya, senior market analyst at Anda, as saying that many emerging market countries have been actively fighting inflation, "it is the continued strengthening of the US dollar that killed them." CNBC website said data shows that the U.S. rate hike this year will reduce future income of developing countries other than China by about $360 billion.
The Brookings Institution in the United States said that in the UK, the plunge in the pound reflects the adverse external environment, the continued impact of "Brexit" and the combined impact of disorderly fiscal policies. In euro zone , according to a report by European Commission at the end of September, inflation in 19 countries reached its highest level since the birth of the euro, and 10 of them reached double-digit overall inflation. The New York Times said that these figures indicate that the Russian-Ukrainian military conflict is destroying European economic growth, sowing the seeds of anxiety, and putting European government resources under greater pressure than the United States and other countries and regions.
In Asia, the United Nations Conference on Trade and Development expects the economic growth rate of East Asia to be 3.3% this year, compared with 6.5% last year; the economic growth rate of Southeast Asia is expected to be 4.1% this year. CNBC said the debt crisis in South and West Asian countries is intensifying.
"Policy coordination and cooperation are more important"
Talking about the response measures to the current economic situation, Jiang Yuechun, a researcher at the Institute of World Economics and Development of the China Academy of International Studies, told the Global Times reporter on the 11th that in the context of high inflation, low growth, the continued conflict between Russia and Ukraine, the continuous increase in US and Europe sanctions against Russia, and the rising uncertainty of the international environment, there are not many countermeasures for countries to stimulate economic growth. He believes that strengthening policy coordination and cooperation among major economies is more important. "As the world's largest economy, the United States should think about its internal and external policies from the perspective of how to maintain the healthy operation of the world economy, and cannot simply consider its own interests.”
In an interview with a reporter from the Global Times, Gao Lingyun, a researcher at the Institute of World Economics and Politics of the Academy of Social Sciences, said that countries should strengthen the coordination of macro-policy , promote global opening up, and do not introduce or implement some new restrictive measures. In addition, institutions with international influence such as the IMF and World Bank should urge the United States and the West to take responsibility, and the latter should not place geopolitics before economic development.
In the view of the two experts, as the world's second largest economy, China has played a stabilizer role in global economic development in recent years, reflecting the image of a responsible major power. "It should be emphasized that it is wrong for international institutions to claim that China's growth rate has dragged down world economic growth. "Gao Lingyun said that China's economy has always maintained a positive growth state, and the reason why the growth rate has declined is partly due to the epidemic, but more importantly, China's economy is in a period of structural transformation and is moving towards a higher quality direction.
