Ukraine war can cause a global recession, says World Bank head
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David Malpass, chief of the World Bank, said the ongoing Russia-Ukraine war can cause a global recession because the price of food, energy, and fertiliser are being influenced.
He was speaking at a business event in the US.
He warned it is hard to see how the world can avoid a recession after looking at the global GDP. "The idea of energy prices doubling is enough to trigger a recession by itself". Last month, the World Bank cut its global economic growth forecast for 2022 to 3.2%, which is by almost a full percentage point.
The World Bank head noted that many European nations are still very much dependent on Russia for oil and gas. Several Western nations have announced plans to reduce their dependence on Russian energy. Developing countries are also being affected by shortages of fertiliser, food, and energy.
"While Europe, China, and the United States are expected to grow more slowly, developing countries are being struck even harder," claimed Malpass. "Higher energy prices were already weighing on Germany, which is the biggest economy in Europe and the fourth largest in the world," reported BBC.
Malpass also expressed concerns about lockdowns in some Chinese cities. He drew attention to Shanghai, the financial, manufacturing, and shipping hub. "The city is still having ramifications or slowdown impacts on the world".
"China was already going through some contraction of real estate. "So the forecast of China's growth before Russia's invasion had already softened substantially for 2022. Then the waves of Covid caused lockdowns which further reduced growth expectations for China," said the World Bank head.
