School colleIt’s been another grim week for economic headlines.
The World Bank led the way on Tuesday by cutting its estimate for global growth this year to 2.9% from April’s 3.2% forecast.
Among the reasons: soaring energy and food prices amid the broader surge in inflation, fresh supply disruptions triggered by Russia’s invasion of Ukraine, lockdowns in China and the drive by central banks to increase interest rates.
"The world economy is again in danger," President David Malpass wrote in the lender's report. "Even if a global recession is averted, the pain of stagflation could persist for several years."
More gloom came the next day from the Organization for Economic Cooperation and Development. It feared the world economy will pay a “hefty price” for the war, and chopped its outlook to 3% from 4.5% in December. It projected expansion to slow to 2.8% next year.
Even rapper Cardi B joined the debate:
relates to The World May Slow, Not Stop
Meantime, other constraints on the global recovery:
Oil prices, which a month ago appeared to be stabilizing, hit a fresh recent peak this week, with West Texas Intermediate surpassing $123 a barrel.
A shortage of workers was also on display, with Lufthansa canceling hundreds of flights this summer due to lack of staff.
The European Central Bank indicated it will soon join counterparts in raising interest rates, potentially aggressively. Former Federal Reserve Vice Chair Alan Blinder said the US may have to endure a slump.