'Recession' threatening the world..!? Warning from World bank..?

Sowmiya Sriram
'Recession' threatening the world..!? Warning from World bank..?

The World bank has warned that the threat of a global recession is increasing as all the central banks of the world, including the Federal Reserve of the united states and the Reserve bank of india, are focusing on reducing the rising inflation rates worldwide. The important problem for the world and economists is that despite the low price of crude oil in the last 45 days, the price Inflation is increasing instead of decreasing. In this situation, the World bank has requested the governments of the world countries to increase supply to ease the constraints behind price inflation.
Global inflation has been rising at the fastest rate in decades at the same time, fueled by excess demand in markets as the world recovers from the coronavirus pandemic, but Russia's war on ukraine and the Covid-19 lockdown in china have hit supply this year, pushing up inflation. As a result, the economic growth rate was also affected.
In the last 3 months, many countries including America, Britain, Europe, and india have raised interest rates, but only china has reduced its production and exports. In this situation, at the end of September, the united states and india are going to raise interest rates at the monetary policy meeting of the central banks.
But in a new report by the economists of the World bank, they have warned that the measures taken by the world countries so far to bring the excessive inflation under control are not enough. Economists say that this has necessitated further interest rate hikes.A rise in interest rates will increase the interest rate on all loans and not only people will pay more as EMIs but companies will also pay more in interest which will affect profit margins and investments for business expansion. Both of these will slow down the growth of a company, and now you understand why. As stock market investors are selling stocks in haste... This is the main reason for the bloody mumbai stock market on Friday.
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