Recession will be 'hard to avoid' as stagflation risks rise: World Bank

[mahatmakanejeeves]

Source: Yahoo! Finance

Yahoo Finance

Recession will be 'hard to avoid' as stagflation risks rise: World Bank

Brian Cheung · Anchor/Reporter
Tue, June 7, 2022, 9:30 AM

The World Bank warned Tuesday that the global economy faces the risk of dreaded "stagflation," with this combination of high inflation and low growth tipping some countries into recession. ... “The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid,” said World Bank President David Malpass.

In its updated Global Economic Prospects report, the World Bank slashed its forecast for global growth this year to 2.9%, down from the 4.1% forecast it published in January.

The World Bank said most of the downgrade is attributed to the Russian invasion of Ukraine, which it had not accounted for in its previous forecast. The international body said it expects “essentially no rebound” next year, projecting only 3% growth for the world in 2023.

The report pointed to the persistence of high energy and food prices — combined with higher interest rates from central banks around the world — for the gloomier outlook.

{snip}

Read more: https://finance.yahoo.com/news/world-bank-recession-will-be-hard-to-avoid-for-some-countries-as-stagflation-risks-rise-133031610.html

[roamer65]

1. Just wait until the food crisis.

RuZZia is weaponizing food by blocking exports of Ukrainian agricultural products.

[IronLionZion]

2. Biden is destroying the world economy

Recession is coming to correct a lot of things unfortunately. "Labor shortage" is making things better for workers who are finding better opportunities. So the worst employers are finding it harder to hire because "nobody wants to work anymore". Fewer jobs will control inflation. But manufacturing and oil drilling will have more workers available to increase production. It's going to hurt for some folks.

The only thing I can count on: as the US economy gets worse, more idiots will deny that I am a US citizen. Every time.

[oldsoftie]

4. Wall St doesnt WANT more oil drilling. That why they're dragging their feet.

The oil Co CEOs will even tell you the problem is much more investors than the govt.

[IronLionZion]

6. Correct, investors want dividends and paying down debt

investors are loving the high prices and want to keep them high

[mahatmakanejeeves]

3. World Bank warns global economy may suffer 1970s-style stagflation

ECONOMY

World Bank warns global economy may suffer 1970s-style stagflation

Risks of further deterioration are mounting

By David J. Lynch
June 7, 2022 at 9:30 a.m. EDT

The global economy may be headed for years of weak growth and rising prices, a toxic combination that will test the stability of dozens of countries still struggling to rebound from the pandemic, the World Bank warned Tuesday.

Not since the 1970s — when twin oil shocks sapped growth and lifted prices, giving rise to the malady known as “stagflation” — has the global economy faced such a challenge. ... The bank slashed its annual global growth forecast to 2.9 percent from January’s 4.1 percent and said that “subdued growth will likely persist throughout the decade because of weak investment in most of the world.”

Fallout from Russia’s invasion of Ukraine has aggravated the global slowdown by driving up prices for a range of commodities, fueling inflation. Global growth this year will be roughly half of last year’s annualized rate and is expected to show little improvement in 2023 and 2024.

This will be the sharpest slump after an initial post-recession rebound that the global economy has suffered in more than 80 years, the bank said. And the situation could get even worse: The Ukraine war could fracture global trade and financial networks, and soaring food prices could spark social unrest in importing countries.

{snip}

By David J. Lynch
David J. Lynch is a staff writer on the financial desk who joined The Washington Post in November 2017 after working for the Financial Times, Bloomberg News and USA Today. Twitter https://twitter.com/davidjlynch

[SWBTATTReg]

5. Stagflation is back again! Japan suffered from this, I don't know if they still are, but

stagflation is difficult to beat/deal with. I also wondered if the concentration of so much wealth into the hands of so few makes it difficult for regulatory entities to deal w/, put in measures that can best help deal w/ this, and I'm not talking price controls, I think that this (price controls) has a negative feel to it, with the republicans yelling 'socialism!' when in fact, measures are needed, serious measures and not their mouths running off to address this (I say this for Japan relied on its economic advisors too, and they were having issues in trying to deal w/ stagflation).

[keep_left]

7. Apropos, Amy Klobuchar wrote a book about the subject.

https://www.barnesandnoble.com/w/antitrust-amy-klobuchar/1138605455

We really need to enforce our antitrust laws again. Manufacturing more things here (especially semiconductors) would also be a good start.

[SWBTATTReg]

11. Thanks. And I do agree w/ you that antitrust laws do need to be enforced. Seems like our Congress

is either too busy to not fine tune the laws on the books and/or the DOJ is too busy, and/or there is simply too much money involved w/ these trillion-dollar entities that will seemingly go on and on forever, w/o ever facing any negative consequences.

So much for having such laws on the books, eh, if the powers that be won't enforce them.

A question that I have in my mind, is that when can a significant portion of the voting public (and those that don't vote but pay taxes like those that vote) be allowed to submit class action suits against these entities for antitrust violations, for political crimes that seem to go on and on w/o negative consequences ever being dealt, etc. I think that we can, but the process seems so impossible, so unused, that I wonder if there are roadblocks to this process (when prosecutors etc. don't act, let the taxpayers/voting public act instead).

[Xolodno]

8. The writing on the wall has been there for awhile now.

Best way to bust out of inflation, is trigger a recession and reset the economy.

[paleotn]

9. Stagflation is overrated....

The parameters of 2022 don't match those of 1978 no matter how much some people want them to.

[HariSeldon]

10. Raising Fed interest rates now is foolish

http://bilbo.economicoutlook.net/blog/?p=49908