International Monetary Fund chief Kristalina Georgieva has said that 2023 is going to be a tough year for the global economy as the United States, China and Europe are experiencing a slowdown.

Third of world in recession this year, warns IMF head

For much of the global economy, the new year 2023 will be more difficult compared to the previous years, said the International Monetary Fund (IMF) on Sunday. The weakening of financial activities in the leading nations, the United States, Europe, and China, has hurt the global economy.&nbsp;

Kristalina Georgieva, IMF's Managing Director, said that 2023 is more challenging than the year we leave behind, Reuters news agency reported. She stated the reason for the global economy's downturn and said, "Because the three big economies, the US, EU, and China, all are slowing down simultaneously."

IMF's stance on global economic growth in 2023, released in October 2022, highlights the influence of the ongoing Russia-Ukraine war and the surge in inflation and interest rates. Central banks like the US Federal Reserve monitor such rates to impact the prices. 
 
Also Read|&nbsp;<a href="www.wionews.com/business-economy/five-signs-why-global-economy-is-headed-for-recession-522569">Five signs why global economy is headed for recession</a>

The rejuvenation of China's economy marked its upliftment of the zero-Covid policy. Amid the surge in coronavirus cases, Chinese President Xi Jinping urged the citizens to put more effort as China enters a 'new phase.' However, Georgieva said, "For the first time in 40 years, China's growth will be equal to or below the global growth."

Georgieva warned that the rapid spread of COVID-19 infections would drag down the regional and global economy. The recent wave might get worse once people start travelling, she added.

Watch|&nbsp;World Business Watch: China's manufacturing contracts at sharpest pace in three years

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IMF will disclose the updated predictions during the World Economic Forum in Davos, Switzerland.&nbsp;

Talking about the US economy, the IMF said the US might be able to avoid the direct torment of recession, unlike a third of the world's economies. As the US labour market is strong, it may be able to dodge the global recession, she added.&nbsp;

However, it may hinder the high-interest rates imposed by the Federal Reserve Board to push down inflation. Fed officials will make the US job market their prime focus.&nbsp;

Official data shows that the US economy created 200,000 jobs in December 2022. Moreover, the occupation front remains stable as the employment rate stayed at 3.7 per cent, one of the lowest since the 1960s. 
 
(With inputs from agencies)

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For much of the global economy, the new year 2023 will be more difficult compared to the previous years, said the International Monetary Fund (IMF) on Sunday. The weakening of financial activities in the leading nations, the United States, Europe, and China, has hurt the global economy.

For much of the global economy, the new year 2023 will be more difficult compared to the previous years, said the International Monetary Fund (IMF) on Sunday. The weakening of financial activities in the leading nations, the United States, Europe, and China, has hurt the global economy. Kristalina Georgieva, IMF's Managing Director, said that 2023 is more challenging than the year we leave behind, Reuters news agency reported. She stated the reason for the global economy's downturn and said, "Because the three big economies, the US, EU, and China, all are slowing down simultaneously." IMF's stance on global economic growth in 2023, released in October 2022, highlights the influence of the ongoing Russia-Ukraine war and the surge in inflation and interest rates. Central banks like the US Federal Reserve monitor such rates to impact the prices. Also Read| Five signs why global economy is headed for recession The rejuvenation of China's economy marked its upliftment of the zero-Covid policy. Amid the surge in coronavirus cases, Chinese President Xi Jinping urged the citizens to put more effort as China enters a 'new phase.' However, Georgieva said, "For the first time in 40 years, China's growth will be equal to or below the global growth." Georgieva warned that the rapid spread of COVID-19 infections would drag down the regional and global economy. The recent wave might get worse once people start travelling, she added. Watch| World Business Watch: China's manufacturing contracts at sharpest pace in three years IMF will disclose the updated predictions during the World Economic Forum in Davos, Switzerland. Talking about the US economy, the IMF said the US might be able to avoid the direct torment of recession, unlike a third of the world's economies. As the US labour market is strong, it may be able to dodge the global recession, she added. However, it may hinder the high-interest rates imposed by the Federal Reserve Board to push down inflation. Fed officials will make the US job market their prime focus. Official data shows that the US economy created 200,000 jobs in December 2022. Moreover, the occupation front remains stable as the employment rate stayed at 3.7 per cent, one of the lowest since the 1960s. (With inputs from agencies) WATCH WION LIVE HERE

Third of global economy to face recession in 2023, warns IMF head

From gas to groceries, the year 2022 has been a whirlwind for people across the world. Prices rose at the fastest pace in decades. Economists say the coming year could bring in feeble growth as central banks raise rates to tackle high inflation. Will 2023 be the year of recession? Molly Gambhir tells you more.

Gravitas: What Could Tip Global Economy Into Recession?

After Twitter and Meta laid off hundreds of employees this year, David Solomon, the chief executive of US investment bank, Goldman Sach unveiled his plan to cut jobs from January next year&nbsp;in his traditional year-end message to staff, amid concerns over the declining global economy.&nbsp;Solomon said, "We are conducting a careful review and while discussions are still ongoing, we anticipate our headcount reduction will take place in the first half of January." People familiar with the situation said that the bank is considering cutting some 4,000 jobs or 8 per cent of its 49,000 workforce.&nbsp;

<a href="https://www.wionews.com/photos/layoffs-in-2022-the-year-tech-firms-workers-would-rather-forget-543679">Also read |&nbsp;Layoffs in 2022: The year tech firms, workers would rather forget</a>

Executives claimed that the workforce increased by nearly 34 per cent since 2018.&nbsp;

No final job-cut numbers have been finalised. The top managers and officials have been asked to identify potential cost-reduction targets.&nbsp;

“We need to proceed with caution and manage our resources wisely,” Solomon said.

Watch |&nbsp;World Business Watch | Tesla to freeze hiring, lay off employees in next quarter: Report

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Goldman and other investment banks around the world enjoyed a boom after the Covid pandemic in 2021 as many companies launched mergers and acquisitions. They were expected to record the same this year, but due to increasing interest rates, this seems difficult.&nbsp;

Despite rising interest rates, Goldman according to a survey conducted by S&amp;P Global Market is expected to report big profits this year and next. The analysts predicted that it will make nearly&nbsp;$12 billion in net profits for 2022 and $13 billion in 2023, Guardian reported.

Despite such profits, the bank has been under pressure to improve its stock market valuation which has relatively declined in comparison to other US investment banks. Its shares fell by 14 per cent in 2022.&nbsp;

(With inputs from agencies)

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After Twitter and Meta laid off hundreds of employees this year, David Solomon, the chief executive of US investment bank, Goldman Sach unveiled his plan to cut jobs from January next year in his traditional year-end message to staff, amid concerns over the declining global economy.

After Twitter and Meta laid off hundreds of employees this year, David Solomon, the chief executive of US investment bank, Goldman Sach unveiled his plan to cut jobs from January next year in his traditional year-end message to staff, amid concerns over the declining global economy. Solomon said, "We are conducting a careful review and while discussions are still ongoing, we anticipate our headcount reduction will take place in the first half of January." People familiar with the situation said that the bank is considering cutting some 4,000 jobs or 8 per cent of its 49,000 workforce. Also read | Layoffs in 2022: The year tech firms, workers would rather forget Executives claimed that the workforce increased by nearly 34 per cent since 2018. No final job-cut numbers have been finalised. The top managers and officials have been asked to identify potential cost-reduction targets. “We need to proceed with caution and manage our resources wisely,” Solomon said. Watch | World Business Watch | Tesla to freeze hiring, lay off employees in next quarter: Report Goldman and other investment banks around the world enjoyed a boom after the Covid pandemic in 2021 as many companies launched mergers and acquisitions. They were expected to record the same this year, but due to increasing interest rates, this seems difficult. Despite rising interest rates, Goldman according to a survey conducted by S&P Global Market is expected to report big profits this year and next. The analysts predicted that it will make nearly $12 billion in net profits for 2022 and $13 billion in 2023, Guardian reported. Despite such profits, the bank has been under pressure to improve its stock market valuation which has relatively declined in comparison to other US investment banks. Its shares fell by 14 per cent in 2022. (With inputs from agencies) WATCH WION LIVE HERE Live TV

Goldman Sachs CEO David Solomon unveils plan to cut jobs from January in his year-end message to staff

The 'I' and "R" words - inflation and recession - came back haunting many countries, already impacted by the pandemic. After two years of economic slowdown, the year 2022 saw matters worsen.

The 'I' and "R" words - inflation and recession - came back haunting many countries, already impacted by the pandemic. After two years of economic slowdown, the year 2022 saw matters worsen. It was the year when the real impact of COVID-19 could be assessed on the global economy, further slammed by the war in Ukraine. While countries like the United States witnessed the fear of recession, the United Kingdom was reeling under two-digit inflation. But have you ever thought about why some countries are going into recession, while some are into inflation? Simply put, inflation is when the prices of commodities rise, while a recession is when the overall economic activities are down for two consecutive quarters. Just days before the year ends, the Centre for Economics and Business Research released a report which cautioned that the world economy is heading for a recession in 2023. Higher borrowing costs, which are intended to tackle inflation, will cause several economies to shrink. The biggest concern of 2022 was high inflation. It began with the Russia-Ukraine war. On February 24, Russia invaded Ukraine while the world economies watched the developments closely. It had a far-reaching impact on the whole world as prices for essential goods, from food grains to oil and natural gas, soared across the globe. In 2022, Zimbabwe witnessed record inflation at 269%, Lebanon at 158%, and Venezuela at 156%. Economists and experts made use of the 'cost of living crisis' concept to monitor and register economic activities. Central banks of many countries were forced to hike the interest rates to bring inflation down. Many countries broke their record of high inflation. Pakistan touched a peak at 42.30% in 2022, which was the highest in 47 years. Even developed countries like the US and UK broke four-decade records on inflation. India's wholesale price index touched a high of 15.80%, the highest in 30 years. The Federal Reserve in the US issued policies to combat inflation but the crisis continues to loom. On the other hand, many people in the UK are struggling to pay electricity bills as rising prices impacted household budgets. Moreover, the global debt crisis has worsened in 2022 with developing nations likely to face debt distress and a growing borrowing burden. Government debt levels as a share of GDP increased in over 100 developing countries between 2019-2021. Amid all these, a word that created a buzz in the economy was 'polycrisis', which means "the simultaneous occurrence of several catastrophic events". Hence, Collins English Dictionary declared 'permacrisis' as the word of the year 2022. Apart from the economy, the year witnessed a meltdown of two key sectors-- tech and cryptocurrency. For these sectors which were once blooming, the year 2022 showed them the mirror. While many companies shut down, a lot of tech companies started laying off employees to keep their businesses running. Microsoft, Amazon, Twitter, Facebook and every big tech company ran to cut the cost. If you look at the stocks, the shares of Indian IT companies fell the most since 2008. Topping the list is MPhasis with a 44% loss in share value. Big companies like Infosys fell 20%, Wipro was down 41% and Tech Mahindra sank 42%. Cryptocurrency too lost its charm. What was once considered a 'lucky coin' saw a huge downfall? Even so, it was also hit by a scam-- FTX scandal. Crashes, contagion and collapses came in such quick succession that investors are now on the verge of asking some serious existential questions. The most famous crypto, Bitcoin fell about 65% from around $46,000 in January to about $16,800 now, according to a report. The second-biggest cryptocurrency, Ethereum, touched a high late last year, and then crashed below $900 in June, its lowest level since the start of 2021. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

2022: When global economy started bleeding

According to the Centre for Economics and Business Research &nbsp;(CEBR), the world faces a recession in 2023. Higher borrowing costs, which are intended to tackle inflation, will cause a number of economies to shrink.&nbsp;

CEBR, one of the UK's leading economics consultancies, mentioned in its latest reports that as predicted 12 months ago, world GDP in USD terms rose above $100 trillion for the first time ever in 2022. Further, it is projected to reach $207 trillion by the end of our forecast horizon in 2037.&nbsp;

CEBR reports further mentioned that in its annual World Economic League Table (WELT), the global economy surpassed $100 trillion for the first time in 2022. However, the report by the British consultancy stated that the world will stall in 2023 as policymakers continue their fight against soaring prices.&nbsp;

Kay Daniel Neufeld, director and head of Forecasting at CEBR, said, "It's likely that the world economy will face recession next year as a result of the rises in interest rates in response to higher inflation."&nbsp;

Last year, the report predicted that struck more or less an optimistic tone as the vaccination campaign against COVID-19 was underway globally. It was expected that there will be normal levels of economic activity despite the Omicron wave and easing lockdown restrictions.&nbsp;

The report mentioned that Russia's invasion of Ukraine in February led to massive economic, food, and fuel crises, eventually rising in price globally.&nbsp;

WATCH |&nbsp;World economy is headed for a recession in 2023&nbsp;

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CEBR report noted, "Inflation has become the main economic story of the past year and even though we are starting to see price growth decelerating in some economies, volatility in global energy markets and entrenched core inflation suggest that it will remain front and centre in 2023 as well."&nbsp;

The report added, "The battle against inflation is not won yet. We expect central bankers to stick to their guns in 2023 despite the economic costs. The cost of bringing inflation down to more comfortable levels is a poorer growth outlook for a number of years to come."&nbsp;

As per the report, China is now not set to overtake the US as the world's largest economy until 2036 at the earliest, which is six years later than expected.&nbsp;

The report also mentioned that it is predicted that India will become the third $10 trillion economy in 2035 and the world's third-largest by 2032.

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According to the Centre for Economics and Business Research (CEBR), the world faces a recession in 2023. Higher borrowing costs, which are intended to tackle inflation, will cause a number of economies to shrink.

According to the Centre for Economics and Business Research (CEBR), the world faces a recession in 2023. Higher borrowing costs, which are intended to tackle inflation, will cause a number of economies to shrink. CEBR, one of the UK's leading economics consultancies, mentioned in its latest reports that as predicted 12 months ago, world GDP in USD terms rose above $100 trillion for the first time ever in 2022. Further, it is projected to reach $207 trillion by the end of our forecast horizon in 2037. CEBR reports further mentioned that in its annual World Economic League Table (WELT), the global economy surpassed $100 trillion for the first time in 2022. However, the report by the British consultancy stated that the world will stall in 2023 as policymakers continue their fight against soaring prices. Kay Daniel Neufeld, director and head of Forecasting at CEBR, said, "It's likely that the world economy will face recession next year as a result of the rises in interest rates in response to higher inflation." Last year, the report predicted that struck more or less an optimistic tone as the vaccination campaign against COVID-19 was underway globally. It was expected that there will be normal levels of economic activity despite the Omicron wave and easing lockdown restrictions. The report mentioned that Russia's invasion of Ukraine in February led to massive economic, food, and fuel crises, eventually rising in price globally. WATCH | World economy is headed for a recession in 2023 × CEBR report noted, "Inflation has become the main economic story of the past year and even though we are starting to see price growth decelerating in some economies, volatility in global energy markets and entrenched core inflation suggest that it will remain front and centre in 2023 as well." The report added, "The battle against inflation is not won yet. We expect central bankers to stick to their guns in 2023 despite the economic costs. The cost of bringing inflation down to more comfortable levels is a poorer growth outlook for a number of years to come." As per the report, China is now not set to overtake the US as the world's largest economy until 2036 at the earliest, which is six years later than expected. The report also mentioned that it is predicted that India will become the third $10 trillion economy in 2035 and the world's third-largest by 2032. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

The global economy is headed for a recession in 2023: Report

The findings are more pessimistic than the latest forecast from the International Monetary Fund. That institution warned in October that more than a third of the world economy will contract and there is a 25 per cent chance of global GDP growing by less than 2 per cent in 2023, which it defines as a global recession.

World Business Watch: World economy headed for a recession, says report

Planes, trains, and automobiles carry us and a lot of other things, but ships carry more than 80 per cent of the goods traded globally. So, stay close to the ports if you want to understand the shifts in global trade patterns.&nbsp;

And by the looks of it maritime trade, which bounced back significantly in the post-Covid months, is&nbsp;growing at a slower pace as the war in Ukraine and economic uncertainty begin to bite the world.&nbsp;

According to UNCTAD, the UN trade body, international maritime trade showed an estimated growth of 3.2 per cent&nbsp;and overall shipments of 11 billion tons in 2021, a rise of 7 percentage points compared to a decline of 3.8 per cent in 2020 when the world shut down due to fears over a global spread of the pandemic. Asia remained the world’s leading maritime cargo handling centre in 2021, accounting for a large chunk of exports and imports.&nbsp;

In a recent report, UNCTAD projected global maritime trade growth to fall to 1.4&nbsp;per cent this year and then grow at an annual average of 2.1&nbsp;per cent between 2023 and 2027 -- a sharply slower rate than the previous three-decade average of 3.3 per cent. According to its latest update, global trade should hit a record $32 trillion for 2022, but a slowdown that began in the second half of the year is only expected to worsen in 2023.&nbsp;

Why is global trade losing the spring in its steps? The World Trade Organization (WTO) blames it on multiple shocks that weigh on the global economy. Fears of Covid continue to linger in China, the Ukraine war is making things difficult for Europe and rising prices is forcing Americans to slow their purchases. So, while WTO economists now predict global merchandise trade volumes to grow by 3.5&nbsp;per cent this year, they are cagey about 2023 predicting a much smaller increase.&nbsp;

To better understand 2023, we would want to return to 2021 when the world started re-opening and demand for consumer goods and e-commerce shot up across countries, much of it pent-up from months of closure. The abrupt rise in demand caused a supply-chain crisis, and that takes us back to the ships.&nbsp;

A surge in demand pushed container freight rates in 2021 five times higher than their pre-Covid levels and a longer turn-around time at congested ports – especially in the United States thanks to a paucity of port workers and truckers -- led to a sharp increase in consumer prices. Though container freight rates have fallen from their peak in early 2022, they remain high for energy cargo, according to UNCTAD.&nbsp;

And then came another economic disrupter. The Russian attack on Ukraine shook both the energy and the commodities markets hard. Mid-year, energy prices were up 78&nbsp;per cent year-on-year with natural gas up 250 per cent, according to WTO data. Crude oil prices were up by 36 per cent. Food prices galloped higher as wheat supplies from war-hit Ukraine stopped due to the closure of Black Sea ports. Dry bulk freight rates rose sharply even as the world was beginning to slowly recover from the pandemic’s earlier economic onslaught, as the war also affected the rail route between China and Europe.&nbsp;

In 2021, the railway was a saviour for shippers who had to look for alternatives to move cargo as ports became congested and airlines still weren’t flying at their pre-Covid capacity. According to UNCTAD data, the demand on the China-Europe railway rose 30 per cent to nearly 1.5 million twenty-foot containers. The war also impeded the use of the trans-Siberian route, which was used by China, South Korea and Japan to move goods into Europe.&nbsp;

It was a double whammy of the sorts never experienced before. The world was as unprepared for the trade stoppage as it was for its recovery. And if current underlying assumptions – a global economic slowdown, continuing higher inflation rates, currency shocks, and higher food, and energy prices among others – hold then 2023 could possibly turn out to be worse than anticipated.&nbsp;

For example, import demand is likely to be subdued in Europe as high energy prices due to the war in Ukraine and Russia’s decision to shut down gas supplies will impact household spend even as manufacturing costs rise. High inflation is eating into the American dream of buying homes and cars.&nbsp;

China, still very much the world’s factory, is struggling due to the earlier difficult Covid closures and now sudden uncertain re-opening, as production gets hit at a time when exports are slowing. Exports from China were lower in October 2022, the first decline in shipments since May 2020, thanks to poor overseas demand. The situation might not change very much very fast.&nbsp;

The IMF expects one-third of the global gross domestic product (GDP) to enter contraction. When the global economy slows, trade slows too. The US – the world’s biggest economy -- which expanded by 5.6 per cent in 2021, is expected to grow by less than 1 per cent next year. High inflation and rising interest rates are choking demand and growth.&nbsp;

China, the other big elephant in the room, is expected to grow a tad stronger next year, but these are still early days of post-Covid reopening and a lot will depend on whether China returns to lockdowns if things go out of hand. India – a bright spot in an otherwise gloomy world -- is also expected to slow, as are Gulf economies, which benefited from high oil and gas prices following the pandemic.&nbsp;

With so much happening, the big question on everybody’s mind is whether trade will only slow or end up shrinking if current underlying assumptions give way to surprises, even shocks. All that is bad news for trade and the ships that sail the oceans. So, watch those ships closely!&nbsp;

(Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.)&nbsp;

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Planes, trains, and automobiles carry us and a lot of other things, but ships carry more than 80 per cent of the goods traded globally. So, stay close to the ports if you want to understand the shifts in global trade patterns.

Planes, trains, and automobiles carry us and a lot of other things, but ships carry more than 80 per cent of the goods traded globally. So, stay close to the ports if you want to understand the shifts in global trade patterns. And by the looks of it maritime trade, which bounced back significantly in the post-Covid months, is growing at a slower pace as the war in Ukraine and economic uncertainty begin to bite the world. According to UNCTAD, the UN trade body, international maritime trade showed an estimated growth of 3.2 per cent and overall shipments of 11 billion tons in 2021, a rise of 7 percentage points compared to a decline of 3.8 per cent in 2020 when the world shut down due to fears over a global spread of the pandemic. Asia remained the world’s leading maritime cargo handling centre in 2021, accounting for a large chunk of exports and imports. In a recent report, UNCTAD projected global maritime trade growth to fall to 1.4 per cent this year and then grow at an annual average of 2.1 per cent between 2023 and 2027 -- a sharply slower rate than the previous three-decade average of 3.3 per cent. According to its latest update, global trade should hit a record $32 trillion for 2022, but a slowdown that began in the second half of the year is only expected to worsen in 2023. Why is global trade losing the spring in its steps? The World Trade Organization (WTO) blames it on multiple shocks that weigh on the global economy. Fears of Covid continue to linger in China, the Ukraine war is making things difficult for Europe and rising prices is forcing Americans to slow their purchases. So, while WTO economists now predict global merchandise trade volumes to grow by 3.5 per cent this year, they are cagey about 2023 predicting a much smaller increase. To better understand 2023, we would want to return to 2021 when the world started re-opening and demand for consumer goods and e-commerce shot up across countries, much of it pent-up from months of closure. The abrupt rise in demand caused a supply-chain crisis, and that takes us back to the ships. A surge in demand pushed container freight rates in 2021 five times higher than their pre-Covid levels and a longer turn-around time at congested ports – especially in the United States thanks to a paucity of port workers and truckers -- led to a sharp increase in consumer prices. Though container freight rates have fallen from their peak in early 2022, they remain high for energy cargo, according to UNCTAD. And then came another economic disrupter. The Russian attack on Ukraine shook both the energy and the commodities markets hard. Mid-year, energy prices were up 78 per cent year-on-year with natural gas up 250 per cent, according to WTO data. Crude oil prices were up by 36 per cent. Food prices galloped higher as wheat supplies from war-hit Ukraine stopped due to the closure of Black Sea ports. Dry bulk freight rates rose sharply even as the world was beginning to slowly recover from the pandemic’s earlier economic onslaught, as the war also affected the rail route between China and Europe. In 2021, the railway was a saviour for shippers who had to look for alternatives to move cargo as ports became congested and airlines still weren’t flying at their pre-Covid capacity. According to UNCTAD data, the demand on the China-Europe railway rose 30 per cent to nearly 1.5 million twenty-foot containers. The war also impeded the use of the trans-Siberian route, which was used by China, South Korea and Japan to move goods into Europe. It was a double whammy of the sorts never experienced before. The world was as unprepared for the trade stoppage as it was for its recovery. And if current underlying assumptions – a global economic slowdown, continuing higher inflation rates, currency shocks, and higher food, and energy prices among others – hold then 2023 could possibly turn out to be worse than anticipated. For example, import demand is likely to be subdued in Europe as high energy prices due to the war in Ukraine and Russia’s decision to shut down gas supplies will impact household spend even as manufacturing costs rise. High inflation is eating into the American dream of buying homes and cars. China, still very much the world’s factory, is struggling due to the earlier difficult Covid closures and now sudden uncertain re-opening, as production gets hit at a time when exports are slowing. Exports from China were lower in October 2022, the first decline in shipments since May 2020, thanks to poor overseas demand. The situation might not change very much very fast. The IMF expects one-third of the global gross domestic product (GDP) to enter contraction. When the global economy slows, trade slows too. The US – the world’s biggest economy -- which expanded by 5.6 per cent in 2021, is expected to grow by less than 1 per cent next year. High inflation and rising interest rates are choking demand and growth. China, the other big elephant in the room, is expected to grow a tad stronger next year, but these are still early days of post-Covid reopening and a lot will depend on whether China returns to lockdowns if things go out of hand. India – a bright spot in an otherwise gloomy world -- is also expected to slow, as are Gulf economies, which benefited from high oil and gas prices following the pandemic. With so much happening, the big question on everybody’s mind is whether trade will only slow or end up shrinking if current underlying assumptions give way to surprises, even shocks. All that is bad news for trade and the ships that sail the oceans. So, watch those ships closely! (Disclaimer: The views of the writer do not represent the views of WION or ZMCL. Nor does WION or ZMCL endorse the views of the writer.) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Watch those ships as global trade growth seen slowing

The Chinese government decided to loosen its strict COVID-19 restrictions under the Zero Covid policy and the decision was lauded by global economic leaders on Friday. Both the International Monetary Fund (IMF) and the World Trade Organization (WTO) welcomed the change in stance and said that the lifting of restrictions will help the country and the global economy in the long run.

"We welcome very much the decisive actions taken by the Chinese authorities... to recalibrate the Covid policies so as to create a better impetus for the revival of growth in China," Kristalina Georgieva, the IMF chief, said at a press briefing according to Reuters.

Also read |&nbsp;<a href="https://www.wionews.com/world/russian-lawmakers-hail-bout-griner-prisoner-swap-as-putins-win-state-media-541528">Russian lawmakers hail Bout-Griner prisoner swap as Putin's 'win'</a>

Due to the COVID-19 pandemic and the ongoing conflict between Russia and Ukraine, the global economy as well as the supply chain suffered major setbacks. With China – one of the biggest economies in the world – also shutting down manufacturing units due to the rise of Covid cases, there was a dearth of stimulus to the global economy and wealth.

However, after the nationwide protests against the restrictions, the authorities in China relented and allowed people to isolate at home. It further said that people did not need negative test results for free movement.

Also read |&nbsp;<a href="https://www.wionews.com/world/iranian-forces-targeting-protesting-womens-faces-and-genitalia-say-medics-541484">Iranian forces targeting protesting women's faces and genitalia, say medics</a>

The effort to boost vaccination rates and anti-viral treatments "is very good for the Chinese people, but also important for Asia and the rest of the world", Georgieva added at the briefing.

"China's performance matters (not just) to China -- it matters to the world economy as well."

Secretary-General of the Organisation for Economic Co-operation and Development, Mathias Cormann, also hailed the impact that the lifting of restrictions will have on the economy.

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The Chinese government decided to loosen its strict COVID-19 restrictions under the Zero Covid policy and the decision was lauded by global economic leaders on Friday.

The Chinese government decided to loosen its strict COVID-19 restrictions under the Zero Covid policy and the decision was lauded by global economic leaders on Friday. Both the International Monetary Fund (IMF) and the World Trade Organization (WTO) welcomed the change in stance and said that the lifting of restrictions will help the country and the global economy in the long run. "We welcome very much the decisive actions taken by the Chinese authorities... to recalibrate the Covid policies so as to create a better impetus for the revival of growth in China," Kristalina Georgieva, the IMF chief, said at a press briefing according to Reuters. Also read | Russian lawmakers hail Bout-Griner prisoner swap as Putin's 'win' Due to the COVID-19 pandemic and the ongoing conflict between Russia and Ukraine, the global economy as well as the supply chain suffered major setbacks. With China – one of the biggest economies in the world – also shutting down manufacturing units due to the rise of Covid cases, there was a dearth of stimulus to the global economy and wealth. However, after the nationwide protests against the restrictions, the authorities in China relented and allowed people to isolate at home. It further said that people did not need negative test results for free movement. Also read | Iranian forces targeting protesting women's faces and genitalia, say medics The effort to boost vaccination rates and anti-viral treatments "is very good for the Chinese people, but also important for Asia and the rest of the world", Georgieva added at the briefing. "China's performance matters (not just) to China -- it matters to the world economy as well." Secretary-General of the Organisation for Economic Co-operation and Development, Mathias Cormann, also hailed the impact that the lifting of restrictions will have on the economy.

Global economic chiefs hail China’s decision of relaxing COVID-19 restrictions

United Kingdom is planning to raise taxes to fix its stagnant economy, now an announcement has been made, UK's Finance Minister Jeremy Hunt, said that all British citizens will soon be paying more taxes. This decision comes at a time when global economic outlook is weakening.

World Business Watch: Decoding the state of Global Economy

The International Monetary Fund said on Sunday that the global economic outlook is even gloomier than projected last month. It cited a steady worsening in purchasing manager surveys in recent months

WION Business News | Global economic outlook getting `gloomier`, says IMF

NASA is preparing to send a mission to an asteroid that is estimated to be worth more than the global economy. It is believed that the asteroid, 16 Psyche, has gold, nickel and iron worth $10,000 Quadrillion. Molly Gambhir tells you more.

Gravitas: NASA to send a mission to 'golden' asteroid

The International Monetary Fund (IMF) said that the global economic growth is expected to slow down by almost 0.2 percentage points in comparison to its July forecast. According to the latest data, the global economy will grow by 2.7 percent in 2023 resulting in recession in some countries.

IMF cuts global growth forecast for 2023, warns ‘the worst is yet to come’

The International Monetary Fund (IMF) said on Tuesday that the global economic growth is expected to slow down by almost 0.2 percentage points in comparison to its July forecast. According to the latest data, the global economy will grow by 2.7 per cent in 2023 resulting in recession in some countries.&nbsp;&nbsp;

“The worst is yet to come, and for many people 2023 will feel like a recession,” the report said.&nbsp;

In the past year, the global economic growth has been severely affected by the COVID-19 pandemic as well as the Russian invasion of Ukraine. With the world facing acute food and fuel shortages, the IMF said that the latest prediction is the “the weakest growth profile since 2001”, according to Reuters.&nbsp;

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IMF Growth Forecast: 2023 
 
USA🇺🇸: 1% 
Germany🇩🇪: -0.3% 
France🇫🇷: 0.7% 
Italy🇮🇹: -0.2% 
Spain🇪🇸: 1.2% 
Japan🇯🇵: 1.6% 
UK🇬🇧: 0.3% 
Canada🇨🇦: 1.5% 
China🇨🇳: 4.4% 
India🇮🇳: 6.1% 
Russia🇷🇺: -2.3% 
Brazil🇧🇷: 1% 
Mexico🇲🇽: 1.2% 
KSA🇸🇦: 3.7% 
Nigeria🇳🇬: 3% 
RSA🇿🇦: 1.1%<a href="https://t.co/VBrRHOfbIE">https://t.co/VBrRHOfbIE</a> <a href="https://twitter.com/hashtag/WEO?src=hash&amp;ref_src=twsrc%5Etfw">#WEO</a> <a href="https://t.co/0TDJbgSuka">pic.twitter.com/0TDJbgSuka</a>
— IMF (@IMFNews) <a href="https://twitter.com/IMFNews/status/1579820463563603974?ref_src=twsrc%5Etfw">October 11, 2022</a></blockquote>
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The report also added the economic slowdown in China as one of the potential reasons behind the current financial crisis. With the Chinese government imposing tough restrictions on the citizens to stop the Covid infection from spreading, the economy has taken a massive hit in the past couple of years.&nbsp;

While major economies like the United States and China are expected to show extremely slow growth in 2023, the Indian economy is expected to grow by 6.1 per cent. If the trend holds true, India is currently enroute to becoming one of the fastest-growing economies in the world by the next year.&nbsp;

Also read |&nbsp;<a href="https://www.wionews.com/world/g7-to-hold-crisis-talks-on-russias-bomb-assault-on-kyiv-524408" hreflang="en">G7 to hold crisis talks on Russia's bomb assault on Kyiv</a>

Back in July, the IMF said that India can grow by 7.4 per cent in the current financial year.&nbsp;

“For emerging markets and developing economies, the shocks of 2022 will re-open economic wounds that were only partially healed following the pandemic,” the report said.&nbsp;

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The International Monetary Fund (IMF) said on Tuesday that the global economic growth is expected to slow down by almost 0.2 percentage points in comparison to its July forecast.

The International Monetary Fund (IMF) said on Tuesday that the global economic growth is expected to slow down by almost 0.2 percentage points in comparison to its July forecast. According to the latest data, the global economy will grow by 2.7 per cent in 2023 resulting in recession in some countries. “The worst is yet to come, and for many people 2023 will feel like a recession,” the report said. In the past year, the global economic growth has been severely affected by the COVID-19 pandemic as well as the Russian invasion of Ukraine. With the world facing acute food and fuel shortages, the IMF said that the latest prediction is the “the weakest growth profile since 2001”, according to Reuters. IMF Growth Forecast: 2023 USA🇺🇸: 1% Germany🇩🇪: -0.3% France🇫🇷: 0.7% Italy🇮🇹: -0.2% Spain🇪🇸: 1.2% Japan🇯🇵: 1.6% UK🇬🇧: 0.3% Canada🇨🇦: 1.5% China🇨🇳: 4.4% India🇮🇳: 6.1% Russia🇷🇺: -2.3% Brazil🇧🇷: 1% Mexico🇲🇽: 1.2% KSA🇸🇦: 3.7% Nigeria🇳🇬: 3% RSA🇿🇦: 1.1%https://t.co/VBrRHOfbIE #WEO pic.twitter.com/0TDJbgSuka — IMF (@IMFNews) October 11, 2022 × The report also added the economic slowdown in China as one of the potential reasons behind the current financial crisis. With the Chinese government imposing tough restrictions on the citizens to stop the Covid infection from spreading, the economy has taken a massive hit in the past couple of years. While major economies like the United States and China are expected to show extremely slow growth in 2023, the Indian economy is expected to grow by 6.1 per cent. If the trend holds true, India is currently enroute to becoming one of the fastest-growing economies in the world by the next year. Also read | G7 to hold crisis talks on Russia's bomb assault on Kyiv Back in July, the IMF said that India can grow by 7.4 per cent in the current financial year. “For emerging markets and developing economies, the shocks of 2022 will re-open economic wounds that were only partially healed following the pandemic,” the report said.

IMF cuts 2023 global growth to 2.7%, India set to be one of fastest-growing economies

Many financial institutions have predicted that the world is headed for another recession.

As rising inflation leads to a hike in interest rates, companies across the world have announced a freeze in hiring and planning to downsize their staff.

On Tuesday, the United Nations warned of an impending global slowdown that may likely be worse than the financial crisis in 2008 and the COVID-19 shock in 2020.

In its Trade and Development Report 2022, the UN Conference on Trade and Development (UNCTAD) warned that the world is “on the edge of a recession” and developing nations like those in Asia could bear the brunt of it.

It said that monetary and fiscal policies in advanced economies — including continued interest rate hikes — could push the world towards a global recession and stagnation.

Economists have given a myriad of reasons for the current recession predictions. Here are some of the five key indicators that suggest a lull in the economy worldwide.

US dollar

The US dollar has been surging for the past few months. It’s now the strongest it has been in two decades, and experts believe the value will grow even stronger in the coming days.

But this surge in the value of the power of the greenback is agitating the economies and markets worldwide, and creating winners and losers.

Though a strong dollar bodes well for the Americans, the consequences are faced by other countries, especially the developing ones.

The rise of US dollar has led to a decline in the value of UK pound, the euro, China’s yuan, Japan’s yen, India’s rupee and many others.

As a result, it makes it more expensive for these nations to import essential items like food and fuel.

In response, central banks in a bid to fight surging inflation and to shore up the value of their own currencies end up raising rates higher

US economy faltering

The key driver of the US economy is shopping. They live by the motto ‘shop till you drop’.

But recently, their spending amount has taken a massive hit. And the reason is linked to the US Fed rate hike.

The central bank has raised interest rates at a historic pace, making mortgage rates to the highest level in decades, and clipping the wings of the business. &nbsp;

Though the Fed hikes rates to taper down inflation, it gives a short-term shock to consumers whose borrowing power decreases for a brief period.

Corporate America tightens purse strings

Though the business prospered in 2020 despite the Covid shocks thanks to the American spenders, it has not been smooth sailing for the past few months, especially in the wake of the Russian invasion of Ukraine, reports CNN.

In mid-September, FedEx, which operates in more than 200 countries and whose performance signals the strength of the market, revised its outlook.

It warned that demand was softening, and earnings were likely to take a hit by more than 40 per cent.

Moreover, last week, Apple cut back on its production of the iPhone 14 after assessing subdued demand. &nbsp;The move took a toll on its shares as it fell by 4 per cent.

Bear makes an entry into Wall Street

According to CNN, Wall Street is now on track for its worst year since 2008.

After inflation set in, the Fed raised interest rates giving a brutal blow to the stock market.

The S&amp;P 500, the broadest measure of Wall Street —&nbsp;and the index responsible for the bulk of Americans’ 401(k)s — is down nearly 24 per cent for the year. Moreover, all three major US indexes are&nbsp;in bear markets— down at least 20 per cent from their most recent highs.

A similar situation has arisen in Europe, where the bond yields are spiking as central banks follow the Fed’s lead in raising rates to shore up their own currencies.

War and inflation

The Russia-Ukraine war and the resultant inflation spike have caused the most harm to the people of the United Kingdom&nbsp;

The UK has been struggling with surging prices since COVID-19, followed by the trade disruptions created by Russia’s invasion of Ukraine.

After the West imposed sanctions on Russian gas, energy prices have soared and supplies have dwindled.

The Britishers, who are grappling with the cost-of-living crisis with 10 per cent inflation, are raising concerns over higher borrowing costs that make millions of homebuyers’ monthly mortgage payments go up by hundreds or even thousands of pounds, reports CNN.

When would recession hit?

While there is a general consensus on the impending global recession, many analysts predict it to happen sometime in 2023. But, no one has predicted how severe it will be or how long it will last.

(With inputs from agencies)

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Many financial institutions have predicted that the world is headed for another recession. As rising inflation leads to a hike in interest rates, companies across the world have announced a freeze in hiring and planning to downsize their staff.

Many financial institutions have predicted that the world is headed for another recession. As rising inflation leads to a hike in interest rates, companies across the world have announced a freeze in hiring and planning to downsize their staff. On Tuesday, the United Nations warned of an impending global slowdown that may likely be worse than the financial crisis in 2008 and the COVID-19 shock in 2020. In its Trade and Development Report 2022, the UN Conference on Trade and Development (UNCTAD) warned that the world is “on the edge of a recession” and developing nations like those in Asia could bear the brunt of it. It said that monetary and fiscal policies in advanced economies — including continued interest rate hikes — could push the world towards a global recession and stagnation. Economists have given a myriad of reasons for the current recession predictions. Here are some of the five key indicators that suggest a lull in the economy worldwide. US dollar The US dollar has been surging for the past few months. It’s now the strongest it has been in two decades, and experts believe the value will grow even stronger in the coming days. But this surge in the value of the power of the greenback is agitating the economies and markets worldwide, and creating winners and losers. Though a strong dollar bodes well for the Americans, the consequences are faced by other countries, especially the developing ones. The rise of US dollar has led to a decline in the value of UK pound, the euro, China’s yuan, Japan’s yen, India’s rupee and many others. As a result, it makes it more expensive for these nations to import essential items like food and fuel. In response, central banks in a bid to fight surging inflation and to shore up the value of their own currencies end up raising rates higher US economy faltering The key driver of the US economy is shopping. They live by the motto ‘shop till you drop’. But recently, their spending amount has taken a massive hit. And the reason is linked to the US Fed rate hike. The central bank has raised interest rates at a historic pace, making mortgage rates to the highest level in decades, and clipping the wings of the business. Though the Fed hikes rates to taper down inflation, it gives a short-term shock to consumers whose borrowing power decreases for a brief period. Corporate America tightens purse strings Though the business prospered in 2020 despite the Covid shocks thanks to the American spenders, it has not been smooth sailing for the past few months, especially in the wake of the Russian invasion of Ukraine, reports CNN. In mid-September, FedEx, which operates in more than 200 countries and whose performance signals the strength of the market, revised its outlook. It warned that demand was softening, and earnings were likely to take a hit by more than 40 per cent. Moreover, last week, Apple cut back on its production of the iPhone 14 after assessing subdued demand. The move took a toll on its shares as it fell by 4 per cent. Bear makes an entry into Wall Street According to CNN, Wall Street is now on track for its worst year since 2008. After inflation set in, the Fed raised interest rates giving a brutal blow to the stock market. The S&P 500, the broadest measure of Wall Street — and the index responsible for the bulk of Americans’ 401(k)s — is down nearly 24 per cent for the year. Moreover, all three major US indexes are in bear markets— down at least 20 per cent from their most recent highs. A similar situation has arisen in Europe, where the bond yields are spiking as central banks follow the Fed’s lead in raising rates to shore up their own currencies. War and inflation The Russia-Ukraine war and the resultant inflation spike have caused the most harm to the people of the United Kingdom The UK has been struggling with surging prices since COVID-19, followed by the trade disruptions created by Russia’s invasion of Ukraine. After the West imposed sanctions on Russian gas, energy prices have soared and supplies have dwindled. The Britishers, who are grappling with the cost-of-living crisis with 10 per cent inflation, are raising concerns over higher borrowing costs that make millions of homebuyers’ monthly mortgage payments go up by hundreds or even thousands of pounds, reports CNN. When would recession hit? While there is a general consensus on the impending global recession, many analysts predict it to happen sometime in 2023. But, no one has predicted how severe it will be or how long it will last. (With inputs from agencies) WATCH WION LIVE HERE:

Five signs why global economy is headed for recession

As the global economy continues to struggle under the impact of multiple shocks, including coronavirus (COVID-19), the Russia-Ukraine war, etc., the World Trade Organisation (WTO) on Wednesday (October 5) revised its trade forecast downwards to one per cent from 3.4 per cent, as forecast in April. Economists have predicted that the global merchandise trade volumes will grow by 3.5 per cent in 2022, which is slightly better than the 3.0 per cent forecast in April.&nbsp;

While presenting a revision of their annual trade forecast, the WTO economists said they still anticipate global economic growth to rise by 2.8 per cent this year, the way it was expected in April.&nbsp;

But they noted that trade across the world is expected to lose momentum in the second half of 2022 and it will remain subdued in 2023 as a result of the global economy being battered by multiple crises. The economists predict a one per cent increase for 2023, down sharply from the previous estimate of 3.4 per cent.&nbsp;

Global economy LIVE | <a href="https://www.wionews.com/business-economy/global-economy-live-asian-stocks-rally-on-global-gues-opec-looking-for-deep-supply-cuts-522507">Click here to get the latest updates related to the world economy</a>&nbsp;

WTO mentioned that the import demand is expected to soften as growth slows in major economies for different reasons.&nbsp;

The latest report also mentioned that high energy prices caused by the Russia-Ukraine war will squeeze household spending and raise manufacturing costs across Europe.&nbsp;

In the United States, &nbsp;interest-sensitive spending in areas such as housing, motor vehicles, and fixed investment will be hit due to the monetary policy tightening.&nbsp;

Covid outbreaks alongside the production disruptions will continue to impact China as external demand is declining.&nbsp;

WTO chalked out the impact on developing nations as growing import bills for fuels, food and fertilizers could lead to food insecurity and debt distress.&nbsp;

Director-General Ngozi Okonjo-Iweala said: "Policymakers are confronted with unenviable choices as they try to find an optimal balance among tackling inflation, maintaining full employment, and advancing important policy goals such as transitioning to clean energy. Trade is a vital tool for enhancing the global supply of goods and services, as well as for lowering the cost of getting to net-zero carbon emissions."&nbsp;

ÁLSO READ |&nbsp;<a href="https://www.wionews.com/world/eu-imposes-eighth-round-of-sanctions-against-russia-since-invasion-522657">EU imposes eighth round of sanctions against Russia since invasion</a>&nbsp;

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Import demand is expected to soften as various factors squeeze spending: high energy prices, monetary policy tightening, and growing bills for food and fertilizers. More in the <a href="https://twitter.com/hashtag/WTOForecast?src=hash&amp;ref_src=twsrc%5Etfw">#WTOForecast</a>: <a href="https://t.co/S5PeiQ5KwR">https://t.co/S5PeiQ5KwR</a> <a href="https://t.co/6F4s3mWUCx">pic.twitter.com/6F4s3mWUCx</a>
— WTO (@wto) <a href="https://twitter.com/wto/status/1577616314042040321?ref_src=twsrc%5Etfw">October 5, 2022</a></blockquote>
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BREAKING: WTO revises its 2023 trade growth forecast downwards to 1% from 3.4%, as forecast in April, as the global economy struggles under the impact of multiple shocks. 2022 trade growth will be 3.5%. The <a href="https://twitter.com/hashtag/WTOForecast?src=hash&amp;ref_src=twsrc%5Etfw">#WTOForecast</a> is here: <a href="https://t.co/S5PeiQ5KwR">https://t.co/S5PeiQ5KwR</a> <a href="https://t.co/hBZQqFtPF1">pic.twitter.com/hBZQqFtPF1</a>
— WTO (@wto) <a href="https://twitter.com/wto/status/1577599869577007106?ref_src=twsrc%5Etfw">October 5, 2022</a></blockquote>
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WATCH | Hong Kong: Credit Suisse shares plummeted 12%, loses private bankers

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The new WTO forecast estimates world GDP at market exchange rates will grow by 2.8 per cent in 2022 and 2.3 per cent in 2023 — the latter is 1.0 percentage points lower than what was previously projected.&nbsp;

Meanwhile, the International Monetary Fund forecasts growth of 3.2 per cent this year and 2.9 per cent in 2023.&nbsp;

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As the global economy continues to struggle under the impact of multiple shocks, including coronavirus (COVID-19), the Russia-Ukraine war, etc., the World Trade Organisation (WTO) on Wednesday (October 5) revised its trade forecast downwards to one per cent from 3.

As the global economy continues to struggle under the impact of multiple shocks, including coronavirus (COVID-19), the Russia-Ukraine war, etc., the World Trade Organisation (WTO) on Wednesday (October 5) revised its trade forecast downwards to one per cent from 3.4 per cent, as forecast in April. Economists have predicted that the global merchandise trade volumes will grow by 3.5 per cent in 2022, which is slightly better than the 3.0 per cent forecast in April. While presenting a revision of their annual trade forecast, the WTO economists said they still anticipate global economic growth to rise by 2.8 per cent this year, the way it was expected in April. But they noted that trade across the world is expected to lose momentum in the second half of 2022 and it will remain subdued in 2023 as a result of the global economy being battered by multiple crises. The economists predict a one per cent increase for 2023, down sharply from the previous estimate of 3.4 per cent. Global economy LIVE | Click here to get the latest updates related to the world economy WTO mentioned that the import demand is expected to soften as growth slows in major economies for different reasons. The latest report also mentioned that high energy prices caused by the Russia-Ukraine war will squeeze household spending and raise manufacturing costs across Europe. In the United States, interest-sensitive spending in areas such as housing, motor vehicles, and fixed investment will be hit due to the monetary policy tightening. Covid outbreaks alongside the production disruptions will continue to impact China as external demand is declining. WTO chalked out the impact on developing nations as growing import bills for fuels, food and fertilizers could lead to food insecurity and debt distress. Director-General Ngozi Okonjo-Iweala said: "Policymakers are confronted with unenviable choices as they try to find an optimal balance among tackling inflation, maintaining full employment, and advancing important policy goals such as transitioning to clean energy. Trade is a vital tool for enhancing the global supply of goods and services, as well as for lowering the cost of getting to net-zero carbon emissions." ÁLSO READ | EU imposes eighth round of sanctions against Russia since invasion Import demand is expected to soften as various factors squeeze spending: high energy prices, monetary policy tightening, and growing bills for food and fertilizers. More in the #WTOForecast: https://t.co/S5PeiQ5KwR pic.twitter.com/6F4s3mWUCx — WTO (@wto) October 5, 2022 × BREAKING: WTO revises its 2023 trade growth forecast downwards to 1% from 3.4%, as forecast in April, as the global economy struggles under the impact of multiple shocks. 2022 trade growth will be 3.5%. The #WTOForecast is here: https://t.co/S5PeiQ5KwR pic.twitter.com/hBZQqFtPF1 — WTO (@wto) October 5, 2022 × WATCH | Hong Kong: Credit Suisse shares plummeted 12%, loses private bankers × The new WTO forecast estimates world GDP at market exchange rates will grow by 2.8 per cent in 2022 and 2.3 per cent in 2023 — the latter is 1.0 percentage points lower than what was previously projected. Meanwhile, the International Monetary Fund forecasts growth of 3.2 per cent this year and 2.9 per cent in 2023. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

WTO predicts trade growth to slow sharply in 2023 amid multiple crises including Covid and Ukraine war

The Organisation for Economic Co-operation and Development (OECD) said on Monday that the world economy will be suffering more than what was previously predicted due to the ongoing Russian invasion of Ukraine. The Paris-based organisation reduced the 2023 growth forecast for the global economy to 2.2 percent. Earlier in June, it was estimated to be around 2.8 per cent.

"A number of indicators have taken a turn for the worse, and the global growth outlook has darkened," OCED wrote in their report titled "Paying the price of war".

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The report also said that the COVID-19 pandemic is still affecting global economy in a negative way with banks around the world increasing interest rates to control inflation.

Global growth stalled in the second quarter of this year and data in many economies "now point to an extended period of subdued growth", the OECD said according to AFP.

The forecasts for all economies around the world looked quite grim in the report with Britain not expected to make any growth. United States have a growth of just 0.5 per cent next year.

Also read |&nbsp;<a href="https://www.wionews.com/world/russia-admits-making-mistakes-in-troop-call-up-during-mobilisation-vows-to-fix-issues-519680" hreflang="en">Russia admits making mistakes in troop call-up during mobilisation; vows to fix issues</a>

According to the forecasts, Germany is expected to be the worst-affected country in Europe with chances of recession due to the ongoing energy crisis. The decision taken by Russia to stop gas supply can result in the German economy shrinking by around 0.7 per cent in 2023.

"The effects of the war and the continuing impacts of Covid-19 outbreaks in some parts of the world have dented growth and put additional upward pressure on prices," the OECD said.

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The Organisation for Economic Co-operation and Development (OECD) said on Monday that the world economy will be suffering more than what was previously predicted due to the ongoing Russian invasion of Ukraine.

The Organisation for Economic Co-operation and Development (OECD) said on Monday that the world economy will be suffering more than what was previously predicted due to the ongoing Russian invasion of Ukraine. The Paris-based organisation reduced the 2023 growth forecast for the global economy to 2.2 percent. Earlier in June, it was estimated to be around 2.8 per cent. "A number of indicators have taken a turn for the worse, and the global growth outlook has darkened," OCED wrote in their report titled "Paying the price of war". Also read | Pak Army helicopter crashes in Balochistan, killing all six on board The report also said that the COVID-19 pandemic is still affecting global economy in a negative way with banks around the world increasing interest rates to control inflation. Global growth stalled in the second quarter of this year and data in many economies "now point to an extended period of subdued growth", the OECD said according to AFP. The forecasts for all economies around the world looked quite grim in the report with Britain not expected to make any growth. United States have a growth of just 0.5 per cent next year. Also read | Russia admits making mistakes in troop call-up during mobilisation; vows to fix issues According to the forecasts, Germany is expected to be the worst-affected country in Europe with chances of recession due to the ongoing energy crisis. The decision taken by Russia to stop gas supply can result in the German economy shrinking by around 0.7 per cent in 2023. "The effects of the war and the continuing impacts of Covid-19 outbreaks in some parts of the world have dented growth and put additional upward pressure on prices," the OECD said.

OECD cuts 2023 global growth forecast to 2.2 per cent due to Ukraine crisis

Though many of the experts of fifth-generation warfare thought that conventional war has become history, the Russia-Ukraine war has put their idea of modern-day warfare into serious scrutiny.&nbsp;

Many thought that in the twenty-first century warfare will be determined less on the battlefield and more in cubicles and on screen.&nbsp;

However, global economic repercussions caused by the warfare between Russia and Ukraine and economic warfare between Russia and, Europe and&nbsp;the United States, their spiralling actions and counteractions by the two sides have already brought the world to the brink of recession.&nbsp;

Russia has continued its oil exports, though it has had to give a deep discount. But the EU has paid a high price. Russia has reduced gas supply through Nordstrom I to 20% of capacity.&nbsp;

The price of natural gas has soared in the EU to $60 per MMBTU. This will have a cascading effect on the price of LNG in Asian markets. They have tripled to $45.39 per MMBTU on August 2022, from $15.65 MMBTU a year ago on August 2021.&nbsp;

In order to survive winter, the EU has initiated operations at conventional fossil fuel units (coal base, oil-based), which were taken out of operation due to their commitment to net zero by 2050.&nbsp;

This may further push back the target emission cut committed by the EU at London Summit. High gas prices have pushed the EU to switch from gas to oil and coal to meet its heating and power needs. This will add to the oil demand. The oil market is calm now because of the fear of recession. But if falling prices lead OPEC to cut production again, there will be a spike in crude prices again.&nbsp;

The oil prices will also be affected by the fate of the Iranian nuclear deal. Recently, the negotiations had been resumed in Vienna. The delegations have now gone back to their capitals for a political decision. If the deal works out, it will pave the way for Iranian oil exports to be resumed. Before the latest round of sanctions, Iran was exporting 2.1 million barrels per day.&nbsp;

This will not substitute more than five million barrels of Russian oil exports in case EU sanctions against that country deepen. Iranian oil, if it comes back to the market, will be a relief for the international oil market, though would not be sufficient to substitute Russian Supplies for EU, considering the same production rate from OPEC. However, considering the present US-Israel-EU lobbying and the current stance of the Iranian govt., it can be predicted that Iranian oil may not come into the international market in near future soon.&nbsp;

In the meantime, the Middle East has become a field for the cold war for US and Russia. US President Joe Biden’s visit to Israel and Saudi Arabia was followed by the visit of Russian President Vladimir Putin to the other side of the gulf. Putin visited Tehran, where he also met the Turkish President. The Turkish economy has been in deep crisis, but its President harbours regional ambitions. Its control of the entry and exit from the Black Sea has underlined its locational advantage for both sides in the Ukraine crisis. This has increased the importance of Turkey to both camps, though Turkey is a NATO member.&nbsp;

The sharp increase in oil prices following the Ukraine war brought President Biden to Saudi Arabia. This was seen as a departure from the position taken by candidate Biden during his election campaign when he had criticized the Crown Prince and threatened to make the Saudi Kingdom a pariah state. What prompted President Biden’s visit to the Saudi Kingdom was the increase in petrol price at the pump in the USA. This had reached the US-wide average of $5 per gallon. This was well past the comfort level of $4 per gallon long held as the limit the US consumer could tolerate. This had an ominous implication in an election year. The Congressional elections are due in November. A loss of the democratic majority in the house would seriously cramp President Biden’s capacity to shape the legislative agenda for the rest of his term.

The Crown Prince promised an increase in production. But the increase of 1,00,000 barrels per day announced subsequently by OPEC&nbsp;was rather disappointing. It was the smallest increase by that grouping in recent years. Despite, the underwhelming response to US President’s request, the market has not only stayed calm, but the prices have gone down.

The OPEC basket of crude has come down from $110.9 to $103.2 per barrel from July’22 last week to August’22 last week. The Indian crude oil basket has come down from $108.92 to $98.31 per barrel during the same period. This can only be attributed to fear of recession. The US economy has contracted for two quarters in a row. The balance in the oil market remains precarious. Any increase in geopolitical tensions in Europe could again lead to a spike in prices.&nbsp;

As the US is trying artificially hold the price of crude in the international oil market by pushing OPEC/Saudi Arabia, any upliftment of sanction on Russian or Iranian oil may immediately spike the oil price very high, as OPEC will not let their revenue cut due to reduction of capacity in future. Crown Prince Mohammad Bin Salman promised to raise the oil production to 13 million barrels per day by 2027.&nbsp;

But this is the long-range target. President Biden wanted prices to be moderated before the elections. The overriding concern was to maintain international oil price stable, even if more stringent EU sanctions against the import of Russian oil go into effect.&nbsp;

Though many of the experts of fifth-generation warfare thought that conventional war has become history, the Russia-Ukraine war has put their idea of modern-day warfare into serious scrutiny.

Though many of the experts of fifth-generation warfare thought that conventional war has become history, the Russia-Ukraine war has put their idea of modern-day warfare into serious scrutiny. Many thought that in the twenty-first century warfare will be determined less on the battlefield and more in cubicles and on screen. However, global economic repercussions caused by the warfare between Russia and Ukraine and economic warfare between Russia and, Europe and the United States, their spiralling actions and counteractions by the two sides have already brought the world to the brink of recession. Russia has continued its oil exports, though it has had to give a deep discount. But the EU has paid a high price. Russia has reduced gas supply through Nordstrom I to 20% of capacity. The price of natural gas has soared in the EU to $60 per MMBTU. This will have a cascading effect on the price of LNG in Asian markets. They have tripled to $45.39 per MMBTU on August 2022, from $15.65 MMBTU a year ago on August 2021. In order to survive winter, the EU has initiated operations at conventional fossil fuel units (coal base, oil-based), which were taken out of operation due to their commitment to net zero by 2050. This may further push back the target emission cut committed by the EU at London Summit. High gas prices have pushed the EU to switch from gas to oil and coal to meet its heating and power needs. This will add to the oil demand. The oil market is calm now because of the fear of recession. But if falling prices lead OPEC to cut production again, there will be a spike in crude prices again. The oil prices will also be affected by the fate of the Iranian nuclear deal. Recently, the negotiations had been resumed in Vienna. The delegations have now gone back to their capitals for a political decision. If the deal works out, it will pave the way for Iranian oil exports to be resumed. Before the latest round of sanctions, Iran was exporting 2.1 million barrels per day. This will not substitute more than five million barrels of Russian oil exports in case EU sanctions against that country deepen. Iranian oil, if it comes back to the market, will be a relief for the international oil market, though would not be sufficient to substitute Russian Supplies for EU, considering the same production rate from OPEC. However, considering the present US-Israel-EU lobbying and the current stance of the Iranian govt., it can be predicted that Iranian oil may not come into the international market in near future soon. In the meantime, the Middle East has become a field for the cold war for US and Russia. US President Joe Biden’s visit to Israel and Saudi Arabia was followed by the visit of Russian President Vladimir Putin to the other side of the gulf. Putin visited Tehran, where he also met the Turkish President. The Turkish economy has been in deep crisis, but its President harbours regional ambitions. Its control of the entry and exit from the Black Sea has underlined its locational advantage for both sides in the Ukraine crisis. This has increased the importance of Turkey to both camps, though Turkey is a NATO member. The sharp increase in oil prices following the Ukraine war brought President Biden to Saudi Arabia. This was seen as a departure from the position taken by candidate Biden during his election campaign when he had criticized the Crown Prince and threatened to make the Saudi Kingdom a pariah state. What prompted President Biden’s visit to the Saudi Kingdom was the increase in petrol price at the pump in the USA. This had reached the US-wide average of $5 per gallon. This was well past the comfort level of $4 per gallon long held as the limit the US consumer could tolerate. This had an ominous implication in an election year. The Congressional elections are due in November. A loss of the democratic majority in the house would seriously cramp President Biden’s capacity to shape the legislative agenda for the rest of his term. The Crown Prince promised an increase in production. But the increase of 1,00,000 barrels per day announced subsequently by OPEC was rather disappointing. It was the smallest increase by that grouping in recent years. Despite, the underwhelming response to US President’s request, the market has not only stayed calm, but the prices have gone down. The OPEC basket of crude has come down from $110.9 to $103.2 per barrel from July’22 last week to August’22 last week. The Indian crude oil basket has come down from $108.92 to $98.31 per barrel during the same period. This can only be attributed to fear of recession. The US economy has contracted for two quarters in a row. The balance in the oil market remains precarious. Any increase in geopolitical tensions in Europe could again lead to a spike in prices. As the US is trying artificially hold the price of crude in the international oil market by pushing OPEC/Saudi Arabia, any upliftment of sanction on Russian or Iranian oil may immediately spike the oil price very high, as OPEC will not let their revenue cut due to reduction of capacity in future. Crown Prince Mohammad Bin Salman promised to raise the oil production to 13 million barrels per day by 2027. But this is the long-range target. President Biden wanted prices to be moderated before the elections. The overriding concern was to maintain international oil price stable, even if more stringent EU sanctions against the import of Russian oil go into effect.

International oil and gas prices may further surge. World is on the verge of deep recession

Is India emerging as an economic bright spot amid fears of a global recession? India's inflation has cooled down after peaking in April and manufacturing output is the highest in 8 months. How did India escape this global economic gloom? Palki Sharma tells you.

Gravitas: India emerging as an economic bright spot?

As global economies show worrying signs of rising food prices, soaring gas prices and high inflation rates, oil super majors witness record-breaking profits. How? Well, the Russian invasion of Ukraine is driving these stunning profits for the oil giants.

WION Fineprint: Oil & gas price surge amid Ukraine war

Taking note of surging inflation and severe slowdowns in the United States and China, the IMF downgrades its outlook for the global economy this year and the next. Will the slowdown in U.S. and China spill over to other economies? Will recession soon be a reality for the world?

WION Fineprint: American & Chinese economies on the edge?

The ongoing Russian invasion of Ukraine has dealt&nbsp;a major blow to the world economy and the resulting food crisis and damage to the supply chain has also deeply impacted its growth. The adverse impact of the ongoing invasion was clear once again on Wednesday as the World Bank cut its global growth forecast by 1.2 percentage points down to 2.9% for 2022. According to the report published by the institution, this was a result of both the ongoing Russia-Ukraine conflict and the impact from the COVID-19 pandemic that was detrimental to a lot of economies around the world.

Also read |&nbsp;<a href="https://www.wionews.com/science/a-lot-of-happy-tears-cancer-disappears-in-every-patient-in-a-small-drug-trial-485905">'Lot of happy tears': Cancer disappears in every patient in a small drug trial</a>

The Global Economic Prospects report stated that the world economy was already struggling from the aftermath of the pandemic and with the Russian invasion making things worse, the global economy is currently headed towards “a protracted period of feeble growth and elevated inflation”.

“The danger of stagflation is considerable today. Subdued growth will likely persist throughout the decade because of weak investment in most of the world. With inflation now running at multi-decade highs in many countries and supply expected to grow slowly, there is a risk that inflation will remain higher for longer,” World Bank President David Malpass wrote in the report.

Also read |&nbsp;<a href="https://www.wionews.com/world/russia-walks-out-of-security-council-meeting-after-eu-blames-kremlin-for-looming-food-crisis-485958" hreflang="en">Russia walks out of Security Council meeting after EU blames Kremlin for looming food crisis</a>

This is the worst growth rate seen in the global economy since the 1970s and by 2024, the pace of global growth is projected to slow by 2.7 percentage points – two times the rate in the late 1970s.

The only winners in the current situation are predicted to be the commodity exporters who can take advantage of the high energy prices, according to the report by the World Bank.

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The ongoing Russian invasion of Ukraine has dealt a major blow to the world economy and the resulting food crisis and damage to the supply chain has also deeply impacted its growth.

The ongoing Russian invasion of Ukraine has dealt a major blow to the world economy and the resulting food crisis and damage to the supply chain has also deeply impacted its growth. The adverse impact of the ongoing invasion was clear once again on Wednesday as the World Bank cut its global growth forecast by 1.2 percentage points down to 2.9% for 2022. According to the report published by the institution, this was a result of both the ongoing Russia-Ukraine conflict and the impact from the COVID-19 pandemic that was detrimental to a lot of economies around the world. Also read | 'Lot of happy tears': Cancer disappears in every patient in a small drug trial The Global Economic Prospects report stated that the world economy was already struggling from the aftermath of the pandemic and with the Russian invasion making things worse, the global economy is currently headed towards “a protracted period of feeble growth and elevated inflation”. “The danger of stagflation is considerable today. Subdued growth will likely persist throughout the decade because of weak investment in most of the world. With inflation now running at multi-decade highs in many countries and supply expected to grow slowly, there is a risk that inflation will remain higher for longer,” World Bank President David Malpass wrote in the report. Also read | Russia walks out of Security Council meeting after EU blames Kremlin for looming food crisis This is the worst growth rate seen in the global economy since the 1970s and by 2024, the pace of global growth is projected to slow by 2.7 percentage points – two times the rate in the late 1970s. The only winners in the current situation are predicted to be the commodity exporters who can take advantage of the high energy prices, according to the report by the World Bank. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

World Bank lowers 2022 global growth forecast to 2.9% from 4.1% in January

The International Monetary Fund has warned against “geo economic fragmentation” as policymakers and business leaders gather at the World Economic Forum in Davos, Switzerland.

Davos World Economic Forum: Global economy faces its biggest test since World War 2, says IMF Chief

After getting battered by the pandemic, supply chain chokeholds and leaps in prices, the global economy is poised to be sent on yet another unpredictable course by an armed clash on Europe’s border.

Even before the Kremlin ordered Russian troops into separatist territories of Ukraine on Monday, the tension had taken a toll. The promise of punishing sanctions in return by President Joe Biden and the potential for Russian retaliation had already pushed down stock returns and driven up gas prices.

An outright attack by Russian troops could cause dizzying spikes in energy and food prices, fuel inflation fears and spook investors, a combination that threatens investment and growth in economies around the world.

However harsh the effects, the immediate impact will be nowhere near as devastating as the sudden economic shutdowns first caused by the coronavirus in 2020. Russia is a transcontinental behemoth with 146 million people and a huge nuclear arsenal, as well as a key supplier of the oil, gas and raw materials that keep the world’s factories running. But unlike China, which is a manufacturing powerhouse and intimately woven into intricate supply chains, Russia is a minor player in the global economy.

Italy, with half the people and fewer natural resources, has an economy that is twice the size. Poland exports more goods to the European Union than Russia.

“Russia is incredibly unimportant in the global economy except for oil and gas,” said Jason Furman, a Harvard economist who was an adviser to President Barack Obama. “It’s basically a big gas station.”

Of course, a closed gas station can be crippling for those who depend on it. The result is that any economic damage will be unevenly spread, intense in some countries and industries and unnoticed in others.

Europe gets nearly 40% of its natural gas and 25% of its oil from Russia, and is likely to be walloped with spikes in heating and gas bills, which are already soaring. Natural gas reserves are at less than one-third of capacity, with weeks of cold weather ahead, and European leaders have already accused Russia’s president, Vladimir Putin, of reducing supplies to gain a political edge.

And then there are food prices, which have climbed to their highest level in more than a decade largely because of the pandemic’s supply chain mess, according to a recent United Nations report. Russia is the world’s largest supplier of wheat, and with Ukraine, accounts for nearly one-quarter of total global exports. For some countries, the dependence is much greater. That flow of grain makes up more than 70% of Egypt and Turkey’s total wheat imports.

This will put further strain on Turkey, which is already in the middle of an economic crisis and struggling with inflation that is running close to 50%, with skyrocketing food, fuel and electricity prices.

And as usual, the burden falls heaviest on the most vulnerable. “Poorer people spend a higher share of incomes on food and heating,” said Ian Goldin, a professor of globalization and development at Oxford University.

Ukraine, long known as the “breadbasket of Europe,” actually sends more than 40% of its wheat and corn exports to the Middle East or Africa, where there are worries that further food shortages and price increases could stoke social unrest.

Lebanon, for example, which is experiencing one of the most devastating economic crises in more than a century, gets more than half of its wheat from Ukraine, which is also the world’s largest exporter of seed oils like sunflower and rapeseed.

On Monday, the White House responded to Putin’s decision to recognize the independence of two Russian-backed territories in the country’s east by saying it would begin imposing limited sanctions on the so-called Donetsk and Luhansk People’s Republics. Jen Psaki, the White House press secretary, said Biden would soon issue an executive order prohibiting investment, trade and financing with people in those regions.

Analysts watching the unfolding conflict have mapped out a range of scenarios from mild to severe. The fallout on working-class families and Wall Street traders depends on how an invasion plays out: whether Russian troops stay near the border or attack the Ukrainian capital, Kyiv; whether the fighting lasts for days or months; what kind of Western sanctions are imposed; and whether Putin responds by withholding critical gas supplies from Europe or launching insidious cyberattacks.

“Think about it rolling out in stages,” said Julia Friedlander, director of the economic statecraft initiative at the Atlantic Council. “This is likely to play out as a slow motion drama.”

As became clear from the pandemic, minor interruptions in one region can generate major disruptions far away. Isolated shortages and price surges — whether of gas, wheat, aluminum or nickel — can snowball in a world still struggling to recover from the pandemic.

“You have to look at the backdrop against which this is coming,” said Gregory Daco, chief economist for EY-Parthenon. “There is high inflation, strained supply chains and uncertainty about what central banks are going to do and how insistent price rises are.”

The additional stresses may be relatively small in isolation, but they are piling on economies that are still recovering from the economic body blows inflicted by the pandemic.

What’s also clear, Daco added, is that “political uncertainty and volatility weigh on economic activity.”

That means an invasion could have a dual effect — slowing economic activity and raising prices.

In the United States, the Federal Reserve is already confronting the highest inflation in 40 years, at 7.5% in January, and is expected to start raising interest rates next month. Higher energy prices set off by a conflict in Europe may be transitory but they could feed worries about a wage-price spiral.

“We could see a new burst of inflation,” said Christopher Miller, a visiting fellow at the American Enterprise Institute and an assistant professor at Tufts University.

Also fueling inflation fears are possible shortages of essential metals like palladium, aluminum and nickel, creating another disruption to global supply chains already suffering from the pandemic, trucker blockades in Canada and shortages of semiconductors.

The price of palladium, for example, used in automotive exhaust systems, mobile phones and even dental fillings, has soared in recent weeks because of fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, used to make steel and electric car batteries, has also been jumping.

It’s too early to gauge the precise impact of an armed conflict, said Lars Stenqvist, chief technology officer of Volvo, the Swedish truck maker. But he added, “It is a very, very serious thing.”

“We have a number of scenarios on the table and we are following the developments of the situation day by day,” Stenqvist said Monday.

The West has taken steps to blunt the impact on Europe if Putin decides to retaliate. The U.S. has ramped up delivery of liquefied natural gas and asked other suppliers like Qatar to do the same.

The demand for oil might add momentum to negotiations to revive a deal to curb Iran’s nuclear program. Iran, which is estimated to have as many as 80 million barrels of oil in storage, has been locked out of much of the world’s markets since 2018, when President Donald Trump withdrew from the nuclear accord and reimposed sanctions.

Some of the sanctions against Russia that the Biden administration is considering, such as cutting off access to the system of international payments known as SWIFT or blocking companies from selling anything to Russia that contains American-made components, would hurt anyone who does business with Russia. But across the board, the U.S. is much less vulnerable than the European Union, which is Russia’s largest trading partner.

Americans, as Biden has already warned, are likely to see higher gasoline prices. But because the U.S. is a large producer of natural gas, those price increases are not nearly as steep and as broad as elsewhere. And Europe has many more links to Russia and engages in more financial transactions — including paying for the Russian gas.

Oil companies like Shell and Total have joint ventures in Russia, while BP boasts that it “is one of the biggest foreign investors in Europe,” with ties to the Russian oil company Rosneft. Airbus, the European aviation giant, gets titanium from Russia. And European banks, particularly those in Germany, France and Italy, have lent billions of dollars to Russian borrowers.

“Severe sanctions that hurt Russia painfully and comprehensively have potential to do huge damage to European customers,” said Adam Tooze, director of the European Institute at Columbia University.

Depending on what happens, the most significant effects on the global economy may manifest themselves only over the long run.

One result would be to push Russia to have closer economic ties to China. The two nations recently negotiated a 30-year contract for Russia to supply gas to China through a new pipeline.

“Russia is likely to pivot all energy and commodity exports to China,” said Carl Weinberg, chief economist at High Frequency Economics.

The crisis is also contributing to a reassessment of the global economy’s structure and concerns about self-sufficiency. The pandemic has already highlighted the downsides of far-flung supply chains that rely on lean production.

Now Europe’s dependence on Russian gas is spurring discussions about expanding energy sources, which could further sideline Russia’s presence in the global economy.

“In the longer term, it’s going to push Europe to diversify,” said Jeffrey Schott, a senior fellow working on international trade policy at the Peterson Institute for International Economics. As for Russia, the real cost “would be corrosive over time and really making it much more difficult to do business with Russian entities and deterring investment.”

After getting battered by the pandemic, supply chain chokeholds and leaps in prices, the global economy is poised to be sent on yet another unpredictable course by an armed clash on Europe’s border.

After getting battered by the pandemic, supply chain chokeholds and leaps in prices, the global economy is poised to be sent on yet another unpredictable course by an armed clash on Europe’s border. Even before the Kremlin ordered Russian troops into separatist territories of Ukraine on Monday, the tension had taken a toll. The promise of punishing sanctions in return by President Joe Biden and the potential for Russian retaliation had already pushed down stock returns and driven up gas prices. An outright attack by Russian troops could cause dizzying spikes in energy and food prices, fuel inflation fears and spook investors, a combination that threatens investment and growth in economies around the world. However harsh the effects, the immediate impact will be nowhere near as devastating as the sudden economic shutdowns first caused by the coronavirus in 2020. Russia is a transcontinental behemoth with 146 million people and a huge nuclear arsenal, as well as a key supplier of the oil, gas and raw materials that keep the world’s factories running. But unlike China, which is a manufacturing powerhouse and intimately woven into intricate supply chains, Russia is a minor player in the global economy. Italy, with half the people and fewer natural resources, has an economy that is twice the size. Poland exports more goods to the European Union than Russia. “Russia is incredibly unimportant in the global economy except for oil and gas,” said Jason Furman, a Harvard economist who was an adviser to President Barack Obama. “It’s basically a big gas station.” Of course, a closed gas station can be crippling for those who depend on it. The result is that any economic damage will be unevenly spread, intense in some countries and industries and unnoticed in others. Europe gets nearly 40% of its natural gas and 25% of its oil from Russia, and is likely to be walloped with spikes in heating and gas bills, which are already soaring. Natural gas reserves are at less than one-third of capacity, with weeks of cold weather ahead, and European leaders have already accused Russia’s president, Vladimir Putin, of reducing supplies to gain a political edge. And then there are food prices, which have climbed to their highest level in more than a decade largely because of the pandemic’s supply chain mess, according to a recent United Nations report. Russia is the world’s largest supplier of wheat, and with Ukraine, accounts for nearly one-quarter of total global exports. For some countries, the dependence is much greater. That flow of grain makes up more than 70% of Egypt and Turkey’s total wheat imports. This will put further strain on Turkey, which is already in the middle of an economic crisis and struggling with inflation that is running close to 50%, with skyrocketing food, fuel and electricity prices. And as usual, the burden falls heaviest on the most vulnerable. “Poorer people spend a higher share of incomes on food and heating,” said Ian Goldin, a professor of globalization and development at Oxford University. Ukraine, long known as the “breadbasket of Europe,” actually sends more than 40% of its wheat and corn exports to the Middle East or Africa, where there are worries that further food shortages and price increases could stoke social unrest. Lebanon, for example, which is experiencing one of the most devastating economic crises in more than a century, gets more than half of its wheat from Ukraine, which is also the world’s largest exporter of seed oils like sunflower and rapeseed. On Monday, the White House responded to Putin’s decision to recognize the independence of two Russian-backed territories in the country’s east by saying it would begin imposing limited sanctions on the so-called Donetsk and Luhansk People’s Republics. Jen Psaki, the White House press secretary, said Biden would soon issue an executive order prohibiting investment, trade and financing with people in those regions. Analysts watching the unfolding conflict have mapped out a range of scenarios from mild to severe. The fallout on working-class families and Wall Street traders depends on how an invasion plays out: whether Russian troops stay near the border or attack the Ukrainian capital, Kyiv; whether the fighting lasts for days or months; what kind of Western sanctions are imposed; and whether Putin responds by withholding critical gas supplies from Europe or launching insidious cyberattacks. “Think about it rolling out in stages,” said Julia Friedlander, director of the economic statecraft initiative at the Atlantic Council. “This is likely to play out as a slow motion drama.” As became clear from the pandemic, minor interruptions in one region can generate major disruptions far away. Isolated shortages and price surges — whether of gas, wheat, aluminum or nickel — can snowball in a world still struggling to recover from the pandemic. “You have to look at the backdrop against which this is coming,” said Gregory Daco, chief economist for EY-Parthenon. “There is high inflation, strained supply chains and uncertainty about what central banks are going to do and how insistent price rises are.” The additional stresses may be relatively small in isolation, but they are piling on economies that are still recovering from the economic body blows inflicted by the pandemic. What’s also clear, Daco added, is that “political uncertainty and volatility weigh on economic activity.” That means an invasion could have a dual effect — slowing economic activity and raising prices. In the United States, the Federal Reserve is already confronting the highest inflation in 40 years, at 7.5% in January, and is expected to start raising interest rates next month. Higher energy prices set off by a conflict in Europe may be transitory but they could feed worries about a wage-price spiral. “We could see a new burst of inflation,” said Christopher Miller, a visiting fellow at the American Enterprise Institute and an assistant professor at Tufts University. Also fueling inflation fears are possible shortages of essential metals like palladium, aluminum and nickel, creating another disruption to global supply chains already suffering from the pandemic, trucker blockades in Canada and shortages of semiconductors. The price of palladium, for example, used in automotive exhaust systems, mobile phones and even dental fillings, has soared in recent weeks because of fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, used to make steel and electric car batteries, has also been jumping. It’s too early to gauge the precise impact of an armed conflict, said Lars Stenqvist, chief technology officer of Volvo, the Swedish truck maker. But he added, “It is a very, very serious thing.” “We have a number of scenarios on the table and we are following the developments of the situation day by day,” Stenqvist said Monday. The West has taken steps to blunt the impact on Europe if Putin decides to retaliate. The U.S. has ramped up delivery of liquefied natural gas and asked other suppliers like Qatar to do the same. The demand for oil might add momentum to negotiations to revive a deal to curb Iran’s nuclear program. Iran, which is estimated to have as many as 80 million barrels of oil in storage, has been locked out of much of the world’s markets since 2018, when President Donald Trump withdrew from the nuclear accord and reimposed sanctions. Some of the sanctions against Russia that the Biden administration is considering, such as cutting off access to the system of international payments known as SWIFT or blocking companies from selling anything to Russia that contains American-made components, would hurt anyone who does business with Russia. But across the board, the U.S. is much less vulnerable than the European Union, which is Russia’s largest trading partner. Americans, as Biden has already warned, are likely to see higher gasoline prices. But because the U.S. is a large producer of natural gas, those price increases are not nearly as steep and as broad as elsewhere. And Europe has many more links to Russia and engages in more financial transactions — including paying for the Russian gas. Oil companies like Shell and Total have joint ventures in Russia, while BP boasts that it “is one of the biggest foreign investors in Europe,” with ties to the Russian oil company Rosneft. Airbus, the European aviation giant, gets titanium from Russia. And European banks, particularly those in Germany, France and Italy, have lent billions of dollars to Russian borrowers. “Severe sanctions that hurt Russia painfully and comprehensively have potential to do huge damage to European customers,” said Adam Tooze, director of the European Institute at Columbia University. Depending on what happens, the most significant effects on the global economy may manifest themselves only over the long run. One result would be to push Russia to have closer economic ties to China. The two nations recently negotiated a 30-year contract for Russia to supply gas to China through a new pipeline. “Russia is likely to pivot all energy and commodity exports to China,” said Carl Weinberg, chief economist at High Frequency Economics. The crisis is also contributing to a reassessment of the global economy’s structure and concerns about self-sufficiency. The pandemic has already highlighted the downsides of far-flung supply chains that rely on lean production. Now Europe’s dependence on Russian gas is spurring discussions about expanding energy sources, which could further sideline Russia’s presence in the global economy. “In the longer term, it’s going to push Europe to diversify,” said Jeffrey Schott, a senior fellow working on international trade policy at the Peterson Institute for International Economics. As for Russia, the real cost “would be corrosive over time and really making it much more difficult to do business with Russian entities and deterring investment.”

What’s at stake for the global economy if Russia invades Ukraine

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