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Countries are afraid of falling into the trap of recession, which is traditionally defined as production outstripping consumption EconomyThis is due to its severe risks to the general state of the economy, jobs, the general performance of the industrial and agricultural sectors, the currency and other basic indicators.
However, modern concepts and challenges have changed the situation to more obvious concerns, most notably the debt default for countries, and the inability to generate debts. Jobs New, leaps in the index inflation Which expresses the state of high prices that consumers are suffering from in most countries of the world, which raises concern that the new face of the recession will carry with it real risks that may not be the collapse of countries, but will constitute direct pressures on consumers’ pockets as a result of the wave of high prices, and may exacerbate if chains are disrupted. food supply, and some global goods began to disappear from store shelves.
Although the level of debt or default is not directly related to economic activity, countries that have become suffering from chronic crises, forcing them to default on debt payments, will not be able to allocate budgets to support economic growth through major projects or development plans, which were the most prominent A savior to stimulate economic activity in the event of a contraction in the performance of the private sector.
The economic recession remains an obsession that threatens the plans of investors and mobilizes monetary and financial policy makers, and its reverberations clearly resound in the world’s stock exchanges, from stocks, currencies, oil, and even metal prices, which have not escaped from that, all of which have fluctuated and bled at the same pace. The historical rises in gas prices and the stability of oil prices above $100 levels and what Accompanied by a rapid and sharp reduction in supplies from Russia, all indicators mixed with each other and sent one message that a recession is inevitable.
energy crisis
The energy crisis has ignited inflation and pushed it to levels that central banks around the world have not been able to control so far, and drained the pockets of citizens whose cost of living has risen to the highest levels in half a century, and the threat of cutting off energy supplies coming from Russia has become a threat to European factories and threatens the loss of thousands of people. Jobs chances.
In the face of this difficult reality, assessments began pouring in from every side, and all of them agreed that the economies of the eurozone, Britain, Canada and South Korea are close to falling into recession, while the United States may partially avoid recession this year, armed with the strength of the labor market and the huge liquidity that Companies are taking possession of it, to remain the only glimmer of hope, as usual, from China, whose economy is expected to consolidate and witness an accelerating pace of growth with the lifting of Corona restrictions.
These fears were reflected in the euro, which plunged to its lowest level in 20 years once morest the dollar, followed by sharp declines in European stock markets, and these declines extended to Wall Street, which bled heavily, and deepened its wounds by the losses of the oil markets, which fell strongly this year, causing violent selling pressure on energy stocks.
Gold prices were not spared from this concern, as they recorded their lowest levels in six months, and most assets became unattractive except for the US dollar, which continued to shine and maintained its highest level in 20 years, benefiting from the wave of interest rate increases in the United States.
What do the stakeholders think?
Several global institutions have expressed their concern regarding economic stagnation, and went beyond that to warning of stagflation, which brings together a contradictory case of slowing growth in economic activity, accompanied by a state of high prices and an increase in inflation rates.
In turn, Kristalina Georgieva, Managing Director of the International Monetary Fund, said that the outlook for the global economy "I got so bad" Since April, it cannot rule out the possibility of a global recession next year given the huge risks that exist.
She added that the IMF will reduce in the coming weeks its forecast for 3.6 percent growth in the global economy for the third time this year, adding that the fund’s economists are still preparing the final new ratios.
The International Monetary Fund is expected to publish its updated forecasts for 2022 and 2023 in late July, following trimming its forecast by nearly 1 percent in April. The global economy had achieved a growth rate of 6.1 percent in 2021.
Debt repayment
Agency downgraded "Fitch" The credit rating has its outlook on sovereign debt, due to concerns regarding rising global borrowing costs and the possibility of a new wave of defaults.
Agency confirmed "Fitch"which monitors more than 100 countries, that the war in Ukraine fuel problems such as high inflation and trade disruptions and weak economies, problems that are now hurting sovereign credit conditions.
While commodity exporters will benefit from higher prices, those who have to import the bulk of energy Or food will suffer.
The number of countries in the list of countries that are in default or whose bond yields in the financial markets indicate that this has happened is 17, which is a record level.
These countries are Pakistan Sri Lanka and Zambia and Lebanon and Tunisia Ghana, Ethiopia, Ukraine, Tajikistan, El Salvador, Suriname, Ecuador, Belize, Argentina Russia and Belarus and Venezuela.
“>
Countries are afraid of falling into the trap of recession, which is traditionally defined as production outstripping consumption EconomyThis is due to its severe risks to the general state of the economy, jobs, the general performance of the industrial and agricultural sectors, the currency and other basic indicators.
However, modern concepts and challenges have changed the situation to more obvious concerns, most notably the debt default for countries, and the inability to generate debts. Jobs New, leaps in the index inflation Which expresses the state of high prices that consumers are suffering from in most countries of the world, which raises concern that the new face of the recession will carry with it real risks that may not be the collapse of countries, but will constitute direct pressures on consumers’ pockets as a result of the wave of high prices, and may exacerbate if chains are disrupted. food supply, and some global goods began to disappear from store shelves.
Although the level of debt or default is not directly related to economic activity, countries that have become suffering from chronic crises, forcing them to default on debt payments, will not be able to allocate budgets to support economic growth through major projects or development plans, which were the most prominent A savior to stimulate economic activity in the event of a contraction in the performance of the private sector.
The economic recession remains an obsession that threatens the plans of investors and mobilizes monetary and financial policy makers, and its reverberations clearly resound in the world’s stock exchanges, from stocks, currencies, oil, and even metal prices, which have not escaped from that, all of which have fluctuated and bled at the same pace. The historical rises in gas prices and the stability of oil prices above $100 levels and what Accompanied by a rapid and sharp reduction in supplies from Russia, all indicators mixed with each other and sent one message that a recession is inevitable.
energy crisis
The energy crisis has ignited inflation and pushed it to levels that central banks around the world have not been able to control so far, and drained the pockets of citizens whose cost of living has risen to the highest levels in half a century, and the threat of cutting off energy supplies coming from Russia has become a threat to European factories and threatens the loss of thousands of people. Jobs chances.
In the face of this difficult reality, assessments began pouring in from every side, and all of them agreed that the economies of the eurozone, Britain, Canada and South Korea are close to falling into recession, while the United States may partially avoid recession this year, armed with the strength of the labor market and the huge liquidity that Companies are taking possession of it, to remain the only glimmer of hope, as usual, from China, whose economy is expected to consolidate and witness an accelerating pace of growth with the lifting of Corona restrictions.
These fears were reflected in the euro, which plunged to its lowest level in 20 years once morest the dollar, followed by sharp declines in European stock markets, and these declines extended to Wall Street, which bled heavily, and deepened its wounds by the losses of the oil markets, which fell strongly this year, causing violent selling pressure on energy stocks.
Gold prices were not spared from this concern, as they recorded their lowest levels in six months, and most assets became unattractive except for the US dollar, which continued to shine and maintained its highest level in 20 years, benefiting from the wave of interest rate increases in the United States.
What do the stakeholders think?
Several global institutions have expressed their concern regarding economic stagnation, and went beyond that to warning of stagflation, which brings together a contradictory case of slowing growth in economic activity, accompanied by a state of high prices and an increase in inflation rates.
In turn, Kristalina Georgieva, managing director of the International Monetary Fund, said that the outlook for the global economy “has worsened a lot” since April and that she might not rule out the possibility of a global recession next year, given the huge risks that exist.
She added that the IMF will reduce in the coming weeks its forecast for 3.6 percent growth in the global economy for the third time this year, adding that the fund’s economists are still preparing the final new ratios.
The International Monetary Fund is expected to publish its updated forecasts for 2022 and 2023 in late July, following trimming its forecast by nearly 1 percent in April. The global economy had achieved a growth rate of 6.1 percent in 2021.
Debt repayment
Ratings agency Fitch has lowered its outlook for sovereign debt, due to concerns regarding rising global borrowing costs and the possibility of a new wave of defaults.
agency confirmed.Fitch‘, which monitors more than 100 countries, that the war in Ukraine fuel problems such as high inflation and trade disruptions and weak economies, problems that are now hurting sovereign credit conditions.
While commodity exporters will benefit from higher prices, those who have to import the bulk of energy Or food will suffer.
Agency confirmed "Fitch"which monitors more than 100 countries, that the war in Ukraine fuel problems such as high inflation and trade disruptions and weak economies, problems that are now hurting sovereign credit conditions.
James McCormack, Head of Sovereign Ratings at Fitch Ratings, said: "to rise interest rates Increases the debt servicing costs government"downgrading the company’s sovereign view to "neutral" From "getting better".
Once once more, the number of countries experiencing downgrades in their credit ratings began to increase this year as the pressure mounted.
Most of the governments covered by the agency "Fitch" Either brought subsidies or applied tax cuts In an effort to mitigate the impact of high inflation. But this had its cost.
McCormack said "While can absorb financial deterioration Through the positive effects of inflation on government debt mechanisms, such effects depend on maintaining low interest rates, and this is no longer certain.".
While commodity exporters will benefit from higher prices, those who have to import the bulk of energy Or food will suffer.
The number of countries in the list of countries that are in default or whose bond yields in the financial markets indicate that this has happened is 17, which is a record level.
These countries are Pakistan Sri Lanka and Zambia and Lebanon and Tunisia Ghana, Ethiopia, Ukraine, Tajikistan, El Salvador, Suriname, Ecuador, Belize, Argentina Russia AndBelarus and Venezuela.
“>
The number of countries in the list of countries that are in default or whose bond yields in the financial markets indicate that this has happened is 17, which is a record level.
These countries are Pakistan Sri Lanka and Zambia and Lebanon and Tunisia Ghana, Ethiopia, Ukraine, Tajikistan, El Salvador, Suriname, Ecuador, Belize, Argentina Russia and Belarus and Venezuela.
