Since the outbreak of the covid-19 in 2020, the world economy has inevitably entered a period of recession, with countries around the world facing serious economic slowdown and inflation, and the global supply chain and the international trade and financial systems suffering from damages and impacts, which, superimposed on the Russian-Ukrainian conflict, the sanctions imposed by Europe and the United States on Russia, as well as the cut-off of natural gas supply from Russia to Europe, have led to a sharp rise in global commodity prices.
In addition, the United States has implemented five consecutive interest rate hikes this year to cope with the increasingly serious domestic inflation, and the US dollar has continued to strengthen, and the US dollar exchange rate has remained high against other currencies in the world, causing great harm to the world economy. In response, World Bank President Malpass said on 19 September that the global economic slowdown could last until 2023 or even longer.
He argued that global fiscal and monetary policies will bring important opportunities for output, and that while overheating is currently being curbed in some regions, the economic situation is not overheated globally, and many regions are falling into recession.
A new study released by the World Bank suggests that the world could be heading for a global recession in 2023 as banks have been raising interest rates to combat inflation.
The report argues that central banks have raised interest rates one after the other this year, in a degree of synchronisation not seen in the last 50 years, and that this trend is likely to continue into next year. However, the current trajectory of expected rate hikes and other policy behaviours may not be enough to bring global inflation down to pre-epidemic levels.