KEEPING THE BOAT AFLOAT

The world economy entered 2022 with massive tailwinds. The reopening of many countries as they learned to live with COVID-19 unleashed a wave of spending and economic growth in 2021 with the World Bank announcing a 5.7-percent year-on-year growth.

That boost, however, has now faded with hampered recovery generating new pressures. The World Bank even lowered its forecast for 2022; it now sees the world economy expanding by 2.9 percent throughout the year, down from that 4.1-percent January forecast.

“For many countries, a recession will be hard to avoid,” David Malpass, President of the World Bank, warned in the Global Economic Prospects report in early June.

The Russia-Ukraine conflict exacerbated inflation for key goods like gasoline and food. Snags in supply chains continue to disrupt global trade. The pain of stagflation has been acute, wide-ranging and potentially chronic. In the United States, gas prices soared to record highs in mid-June.