‘We must change course’: UN warns that the world is on the brink of recession

Global economy on the brink of collapse, IIF says.

LAGOS (CoinChapter.com) — The global economy is teetering on the brink of recession, according to a warning issued by the United Nations, which noted that developing nations could bear the brunt of it.

In detail, the UN warned of an impending global slowdown that may likely be worse than the 2008 financial crisis. The UN Conference on Trade and Development (UNCTAD) via its 2022 report issued the alarming warning.

It said the world is on the edge of a recession and nations like those in Asia could suffer worse. It argued that monetary and fiscal policies in advanced economies — including continued interest rate hikes — could push the world towards a global recession and stagnation.

While there is no particular date when the recession might hit, the world body is calling for a consensus to prevent the impending global economic slump. It emphasized that if global economic organizations come together the recession can be averted. It said, “We still have time to step back from the edge of recession. Nothing is inevitable. We must change course.”

Similarly, Secretary-General of UNCTAD Rebeca Grynspan said the world might record another economic downtrend as witnessed during the pandemic. Grynspan said:

“We call then for a more pragmatic policy mix that deploys strategic price controls, windfall taxes, anti-trust measures and tighter regulations on commodity speculation. I repeat, a more pragmatic policy mix … we also need to make greater efforts to end commodity price speculation.”

Global Economy On The Brink Of Recession —IIF

In the same vein, the Institute of International Finance in its recent report has also declared that the global economy is heading towards a recession.

In its latest forecast, the monetary agency estimates the global gross domestic product to grow 2.2 percent this year, with activities slowing to 0.5 percent in the fourth quarter. Notably, the Euro area and emerging markets, excluding China, are anticipated to go into a recession by the end of the year.

The IIF’s estimates are below the latest prediction from the International Monetary Fund, which has also lowered its growth forecast this year. This is mainly due to the Ukraine war and inflation stoked by soaring commodity prices. The IMF projects global growth at 3.6% this year and next, down 0.8 and 0.2 percentage points from its January forecast, respectively.

“In the past, rising uncertainty and mounting recession risk have had important effects on investor psychology. Making markets less tolerant of monetary policy tightening that is seen as no longer warranted.”
The institute said.

Global CEOs Optimistic About Global Economy

Meanwhile, the KPMG 2022 CEO Outlook, has indicated that 68% of CEOs believe that the projected recession will be “mild-and-short.”

Moreover, 14% of senior executives identify economic hardship as among the most pressing concerns today. Additionally, 73% of senior executives believe that a recession will disrupt anticipated growth in the world’s economy.