Ngozi Okonjo-Iweala, director general of the World Trade Organization, predicted this Tuesday, September 27 a “global recession”.
The director general of the World Trade Organization on Tuesday predicted a “global recession” as the world is in the grip of “multiple crises”. Speaking at the opening of the WTO’s annual public forum in Geneva, Ngozi Okonjo-Iweala stressed that the organization previously expected a “post-pandemic recovery”.
“But now we have to deal with what looks like an approaching recession,” she said, before clarifying that it was “a global recession”. “I think that’s where we’re headed. But at the same time, we have to start thinking regarding recovery. We have to restore growth,” she said.
She nevertheless stressed that the situation was “very difficult”, with the world facing “multiple crises”. Insecurity, climatic shocks, rising food prices, so many “simultaneous exogenous shocks” that weaken the world, according to the boss of the WTO. But “we have to think regarding what we need to do, what policies we need to pursue to restore growth,” she said.
Food Safety
In the short term, her first concern was “how to ensure food security” in the world, she also explained, saying that she was also concerned regarding issues of access to energy.
The OECD (Organization for Economic Co-operation and Development) sharply downgraded its global growth forecast for next year on Monday in the face of the more lasting than expected effects of the conflict in Ukraine and the rise in central bank interest rates for contain inflation. Commenting on the rise in key rates, Ngozi Okonjo-Iweala said that “central banks really have no choice” but to increase them because of inflation. But she stressed that these increases have “quite serious” effects on developing countries which will see debt service increase.
She also stressed the importance for central banks to clearly determine whether inflation is caused by strong demand or whether the rise in prices is linked to structural reasons on the supply side. “If these are supply-side factors that you have no control over, continuing to raise interest rates is counterproductive,” she warned.