Global Economic Live Updates: The global economy is facing massive headwinds from inflation, recession, stock market crash and currency depreciation in all countries. Welcome to WION’s live blog on global economics and affairs.
The global economy has been exacerbated by a perfect storm of the Covid pandemic, the Russian-Ukrainian conflict and the standoff between China and the West. The Organization for Economic Co-operation and Development has predicted that the global economy will grow by 3% this year, much less than the 4.5% predicted earlier.
Here is a ready calculation of what this live blog will cover:
Cost of living crisis
The pandemic and the war in Ukraine have triggered a global crisis in the cost of living, quickly putting a strain on household budgets. From New Zealand to Nigeria to the UK, food prices have risen and incomes have fallen. This has important implications for levels of poverty and hunger, educational attainment and access to energy.
Supply chain bottlenecks
The global supply chain crisis emerged in 2021 following the Covid pandemic which severely affected global shipments, causing global shortages and affecting consumption patterns. Experts predict the shortage is likely to last another two to three years due to strict Covid testing protocols imposed on China’s biggest ports following a local outbreak.
Inflation and rising fuel prices
According to a Reuters poll of more than 500 economists, rising commodity prices and an escalation in the Russian-Ukrainian war would lead to a massive spike in inflation rates across the world. Global oil and gas prices soared after Russia invaded Ukraine over fears of supply disruptions. International oil prices hit a 13-year high of $140 a barrel in March before losing some of the gains. Brent was trading Thursday at $101.73 a barrel.
Grain shortage and hunger crisis
The war in Ukraine not only caused a shock in commodity prices, but also led to a severe shortage of food. Ukraine and Russia together account for almost a third of global wheat supplies, of which Ukraine’s contribution is almost 10%. In 2019, Ukraine accounted for 16% of global corn supplies and 42% of sunflower oil, according to UN data. The current blockade of Ukraine and the stockpiling of grain by some countries have caused shortages in countries already affected by food insecurity.
Low GDP figures
The head of the International Monetary Fund has warned that the outlook for the global economy has “darkened considerably” in recent months. The IMF hinted that the agency would revise down its global growth forecasts for 2022 and 2023 later this month, after warning in April that its forecast of 3.6% was likely to be revised down. decrease. China’s economic growth slowed sharply in the second quarter, registering a tepid 0.4 percent year-on-year in the April-June quarter, official data showed on Friday. This is the worst performance for the world’s second-largest economy since the data series began in 1992, excluding a 6.9% contraction in the first quarter of 2020 due to the initial COVID shock.
Stock market crash
The uncertainty of the war in Russia, the recession in the United States and soaring gas prices around the world sent global stock markets tumbling with no relief in sight.
The pan-European STOXX 600 index lost 1.53% and the MSCI gauge of stocks across the world lost 0.82%.
On Wall Street, stock indexes fell on Thursday after weaker-than-expected profits at major U.S. banks JPMorgan Chase & Co and Morgan Stanley underscored growing fears of a sharp economic slowdown.
The Dow Jones Industrial Average fell 0.46%, the S&P 500 lost 0.30% and the Nasdaq Composite added 0.03%.
Inflation and political instability have led to chaos around the world, especially in Sri Lanka and Pakistan where ruling governments have been toppled for failure to control inflation. Even in some developed countries like the UK and Italy, the crisis in the cost of living has contributed to a political crisis, forcing their leaders to resign.
This live blog will dive into all of these aspects, as they happen.