Pak Sahafat – The Washington Post wrote in a report: Following the actions of the US Central Bank (Federal Reserve) to increase bank interest rates several times to curb inflation, American economists expressed concern about the economic recession in this country, rather than the world economy entering a recession.
According to Pak Sahafat News Agency, this American newspaper wrote: While analysts say that the US economy has grown in the third quarter of this year, the signs of crisis are increasing both inside and outside the US.
In the world’s three largest economies; the rise in the cost of renting housing has pushed the real estate market in the United States into recession, the energy shortage in Germany has damaged the country’s manufacturing sector, and repeated quarantines in China have weakened businesses.
The central banks of countries have limited bank credits to fight unprecedented inflation. Governments have slashed funding for post-coronavirus recovery efforts, and the global economy is receiving the least support from policymakers in 50 years.
In the meantime, the World Bank warned in a new report last week about the increased risk of global recession.
While the central banks in Europe, Canada, Australia and Chile have increased the bank interest rate during the last month in order to curb inflation, it is expected that the US central bank will increase the interest rate next week for the fifth time since April.
Many economists have expressed concern about the incorrect forecast of the global economy and the hasty action of central banks in curbing inflation.
“Morris Obstfeld”, the former chief economist of the International Monetary Fund, stated: “There is no sign that central banks pay attention to the effects of their policies on other countries. For example, since the price of crude oil is in dollars, oil importing countries, including Tunisia, have been severely affected. A rise in the global price of the dollar also hurts developing countries with large dollar debts, as their national currencies lose value against the dollar.
According to this report, despite the measures taken by the Central Bank of America in recent months to curb the growth of inflation, the Federal Reserve has not been successful in controlling the speed of the economy and reducing the pressure on prices.
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US firms such as Oxford Economics have stated that the Federal Reserve will continue its measures to contain prices, even if it puts the US economy into a short-term recession.
The International Monetary Fund warned this summer that the global economy was at risk of a recession as a result of the aftershocks of the Ukraine war, the pandemic and inflation. Although there is no official definition for the term global economic recession, the World Bank uses the term to describe a decline in global GDP per capita.
According to some economists, the broad decline in a wide range of indicators, including industrial production, overseas investments, employment and trade, and stagnation in a large number of major economies provide an accurate definition of a true global recession.
Meanwhile, Europe is trying to adapt to new conditions that include the loss of Russian natural gas resources. The European Central Bank has raised interest rates twice since July to curb inflation, which now stands at 9.1 percent.
Some economists also say that wider changes are taking place; after several decades in which “global integration” did not allow economic pressures to enter the United States and other advanced economies of the world, external factors are now influencing inflation in these countries.
Considering that it can be said that the inflation rate in America, Europe, Canada and England is at the highest level during the last 40 years, the central banks of these countries continue to increase the rates to treat the insignificant economic growth.
Considering that it can be said that the inflation rate in America, Europe, Canada and England is at the highest level during the last 40 years, the central banks of these countries continue to increase the rates to treat the insignificant economic growth. The total amount of this budget is estimated to be more than a quarter of China’s GDP, which is much more than the amount that the United States spent on economic stimulus.
The report added: The funds used by the Chinese government eventually turned into orders for factories in the United States and Europe, copper mines in Peru, and iron ore producers in Australia.
Today, however, China is grappling with domestic economic problems ahead of a crucial Communist Party congress in October that is expected to grant President Xi Jinping a third term in an unprecedented move. Chinese leaders seem reluctant to use the tools they used in the past.