Foreign ministers and central bankers from around the world will meet in Washington in the coming days amid economic turmoil that could “plunge the planet into recession,” Politico reports, predicting an agreement on a coordinated response to the problem will run into hurdles. if reached.

The war in Ukraine, persistently high inflation, rising interest rates, a fragile banking system and a slowdown in China threaten the economy.

Meanwhile, interstate tensions are rising as rich countries are “rapidly raising interest rates to counter rising prices, thereby creating massive debt in the developing world. China competes for influence with the US and the EU. which face their own trade conflicts. And Russia’s geopolitical role continues to sharply divide governments.

The scene “is going to be chaotic,” predicts Douglas Rediker, who represented the US on the board of the International Monetary Fund from 2010 to 2012.

Highlighting existing concerns, the World Bank warned last month of the threat of a “lost decade” that could undermine efforts to fight poverty and combat climate change.

The spring meetings of the IMF and the World Bank will be dominated by an ever longer list of economic uncertainties. next week, creating problems for leaders facing food and energy restrictions and global warming.

Low growth rates “everywhere”

“There is no real driver of growth,” says Liliana Rojas Suarez of the Center for Global Development. “It’s not just about how one area is weaker than the other. Everywhere you look, growth is very low, and this, of course, affects everything else.”

In the US, growth this year is expected to be no more than 0.4%. In 2024, he can record a figure of 1.2%. In Europe, growth prospects are uncertain amid existing crises and unrest in the banking sector.

Key inflation indicators are rising and the European Central Bank’s impending “fast and furious contraction” of the money supply is raising concerns about the bloc’s outlook. In the EU, they expect economic stagnation with growth below 1%, after last year’s 3.5% – higher than their counterparts in the US and China.

“I don’t think the IMF meetings will be hopeful, they will be somewhat depressing,” says Rojas Suarez, believing that a sense of fragility “on every corner” will dominate.

The China factor.

A key issue that will overshadow the meetings is the role of China, which, after a major government reshuffle, is increasingly at odds with the US over trade and technology.

Key questions are the extent to which China should jointly determine the governance of international organizations, commensurate with its economic strength, and whether it should assist in debt relief efforts for developing countries, given that Beijing is a major creditor.

The World Trade Organization forecast on Wednesday that international trade is expected to grow by 1.7% this year. However, he warned that international economy fragile, trade still recovering from Covid-19and Russia’s invasion of Ukraine and high inflation will cause turmoil

The World Bank, a developing-country lender, warned last week that new policies are needed to boost productivity and boost investment to avert what could be a difficult decade for the global economy.

The IMF warned on Wednesday that the world could lose trillions of dollars in the future if it is geopolitically divided into competing parties.

Outgoing World Bank President David Malpas points out that the world economy is suffering from stagflation, that is, from low growth rates, with persistent price inflation.

“Looking at things as they are, the problem is that there may not be progress. We must avoid a lost decade.”

Source: Politico