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World Bank chief warns of global recession

2022-05-26 09:07:43Kosova&Bota SHKRUAR NGA REDAKSIA VOX
World Bank chief warns of global recession
 David Malpass

World Bank leader David Malpass has warned that Russia's war in Ukraine could trigger a global recession following rising food and energy prices.

He said in a meeting with businesses in the United States that it is difficult to "find ways to avoid a recession."

According to him, several series of isolation measures in China are increasing concerns about the economic situation.

His comments constitute the latest warning that the world economy may shrink.

"As we look at gross domestic product (GDP). It is difficult to see reversals of the recession," Malpass said, without elaborating.

"Just the idea of ​​doubling energy prices is enough to spur the recession," he added.

Last month, the World Bank cut its growth forecast for this year to 3.2 percent.

Gross domestic product (GDP) is a measure of economic growth and one of the most important ways to measure how well or badly an economy is performing, and is closely monitored by economists and banks.

GDP also helps businesses estimate when to expand, recruit more workers, or invest less and reduce the workforce.

Governments also use GDP to make decisions about everything from taxes to spending, while helping banks decide when to raise or lower interest rates.

Malpass has said many European countries are still heavily dependent on Russian oil and gas.

He has made these statements, despite the fact that some Western countries have made plans to reduce their dependence on Russian energy.

According to the head of the World Bank, if Russia cuts off gas supplies, this could cause a "significant slowdown" in the region's economy.

He said high energy prices were already weighing on Germany, which has the largest economy in Europe and the fourth largest in the world.

Malpass has said developing countries are also facing food and energy shortages.

Risks from isolation in China
The World Bank leader has said during a meeting with businesses that he is concerned about isolation measures in some of China's largest cities, including Shanghai.

"China has already been facing some contractions in the real estate sector, so forecasts for economic growth there, even before the Russian invasion of Ukraine, have been dim," he said.

"Then the waves of COVID-19 in China have triggered isolations that have further reduced growth forecasts," he added.

Even Chinese Premier Li Keqiang has said the world's second-largest economy has been hit hard by recent isolation measures, compared to the start of the 2020 pandemic.

He has called for more work by officials to open factories after the isolations.

"Progress is not satisfactory," Li said.

"Some provinces are reporting that only 30 percent of businesses have reopened la the rate should reach 80 percent in a short period of time."

Full or partial isolations were implemented in dozens of Chinese cities in March and April, including the closure of Shanghai.

In recent weeks, many Chinese officials have said that various sectors of the economy have been affected by these measures, from production to sales.


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