The severity of the interlocking issues afflicting the global economy became clear this week, heightening worries of a recession, job losses, famine, and a stock market crash.
The newest inflation figures from major nations such as the United States and France revealed that prices on a wide variety of commodities climbed faster in June than at any time in the previous four decades.
China’s economy, the world’s second-biggest, rose by only 0.4 percent from April to June compared to the same time the previous year. This performance, which was stunningly poor by previous standards, jeopardized the prospects of hundreds of nations that trade substantially with China, including the United States. It emphasized the fact that the world economy has lost a crucial motor.
The threat of decreasing economic development mixed with rising prices has even resurrected a hated term that was commonplace in the 1970s when the world faced comparable problems: stagflation.
US, China, and Germany are badly caught up by inflation and recession. World Bank stated that approx 12 nations are nearing a similar fall as Sri Lanka. Even though chaos all around India emerges as a Global Leader & best investment destination under PM Modi
The majority of the challenges tearing at the global economy were set in motion by the world’s reaction to the spread of Covid-19 and its attendant economic shock, even as they have been exacerbated by the most recent upheaval — Russia’s disastrous attack on Ukraine, which has reduced food, fertilizer, and energy supplies.
“The pandemic itself disrupted not only the production and transportation of goods, which was the original front of inflation but also how and where we work, how and where we educate our children, global migration patterns,” said Julia Coronado, an economist at the University of Texas at Austin, speaking this past week during a discussion convened by the Brookings Institution in Washington.
The outbreak spurred governments to implement lockdowns to slow its spread, impeding enterprises from China to Germany to Mexico. When people were confined to their homes, they ordered record amounts of products — exercise equipment, kitchen appliances, gadgets — which overloaded the ability to manufacture and distribute them, resulting in the Great Supply Chain Disruption.
Whereas over the last four decades, India has experienced rapid economic expansion. Real per capita income has grown fourfold throughout this time span. India’s share of global output has more than quadrupled to 7%, and it is now the world’s third-biggest economy in terms of buying power parity.