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World Bank issues warning of global recession

World Bank stated that the ongoing Russia-Ukraine war could bring a global recession as food, energy, and fertilizer the prices go higher.

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World Bank stated that the ongoing Russia-Ukraine war could bring a global recession as food, energy, and fertilizer the prices go higher

The World Bank boss David Malpass apprised the US business event held on Wednesday that it is difficult to “see how we avoid a recession”. This is the latest warning over the rising risk that the world economy may be set to contract because of the Russia Ukraine war. He further said that a series of coronavirus lockdowns in China is adding to concerns about a slowdown. Moreover, he added that “As we look at the global GDP… it’s hard right now to see how we avoid a recession,”. He told that “The idea of energy prices doubling is enough to trigger a recession by itself,”. In the previous month, the World Bank cut its global economic growth forecast for this year by almost a full percentage point, to 3.2%.

Read more: the Russia-Ukraine war Archives – Global Village Space

It is to remind us that Russia is one of the largest export of oil and gas to the world. The European energy security is closely dependent on Russia as it imports its 40 percent gas from the Russian federation. The world bank chief said that many European countries were still too dependent on Russia for oil and gas. That’s even as Western nations push ahead with plans to reduce their dependence on Russian energy. He also told a virtual event organized by the US Chamber of Commerce that moves by Russia to cut gas supplies could cause a “substantial slowdown” in the region. He noted that higher energy prices were already weighing on Germany, which is the biggest economy in Europe and the fourth largest in the world.

Read more: Russian Invasion to Shrink Ukraine Economy by 45 Percent

Especially, developing countries are also being affected by shortages of fertilizer, food, and energy, Mr. Malpass added. He also raised concerns about lockdowns in some of China’s major cities – including the financial, manufacturing, and shipping hub of Shanghai – which he said are “still having ramifications or slowdown impacts on the world”. “China was already going through some contraction of real estate, so the forecast of China’s growth before Russia’s invasion had already softened substantially for 2022,” he said. “Then the waves of Covid caused lockdowns which further reduced growth expectations for China,” he said.

Read more: War in Ukraine impacting global trade and world’s poorest