War in Ukraine could send world into recession, says World Bank

The President of the World Bank, David Malpass, said on Thursday (25) that the war in Ukraine could send the world into a recession, especially given the rise in energy and food prices.

At an event at the US Chamber of Commerce, the official pointed out: “When we look at global GDP, it is now difficult to see how we avoided a recession”.

“The landscape of the global economy is very challenging, including for developed economies, but especially in developing countries,” said Malpass.

According to the official, Ukraine and Russia should face contractions, while the US, Europe and China should have their growth slowed down.

According to him, there is a lack of food and fertilizers and increasing the supply of supplies in countries other than Russia will be important.

“Unfortunately, so far there has not been much progress in this area. If governments announce that they will increase supply, it would affect inflation expectations.”

In addition, in the leader’s view, the lockdowns in China to try to contain were negative for the global economy, since they also interfered with supply chains.

In Malpass’s view, fiscal and monetary policies can also help control inflation.

“Some of the main central banks have changed their policy,” said the director, pointing out that the global governance system now has more conditions to carry out its actions.

“Central banks must use all their tools to bring down inflation,” he concluded. On the fiscal side, he indicated that it is necessary to try to discourage demand.