International financial institutions have been unveiling their prospects for a bigger recession next year in response to interest rate hikes in response to inflation.
The World Bank, in a report released on the 27th, said that food and energy prices, which soared in the Ukraine war, will be maintained for the next three years, and that the global economy is highly likely to undergo stagflation in the 1970s.
Deutsche Bank's report on the 26th revealed that the US economy is likely to plunge into recession next year as the US Federal Reserve (FED) raises interest rates by 5-6% to control inflation.
According to the World Bank report, “the UN food price index is the highest since its introduction 60 years ago,” and “international wheat prices soared 42.7%, barley 33.3%, soybeans 20%.”
Deutsche Bank said that it is impossible to maintain the US benchmark interest rate at 2.5%, and it is inevitable that the US economy will fall into a serious recession.
The World Bank sees the surge in energy prices as “more than 50%,” and forecasts that European natural gas prices will remain 15% higher than last year, even if they fall next year and 2024.
In oil price projections, the report predicts that the price of Brent will hold until 2024 and hover around $100 a barrel.
"The overall situation represents the largest commodity shock we have experienced since the 1970s, and is reminiscent of the stagflation horrors of the 1970s," World Bank Vice President Indermit Jill said in the report.
Deutsche Bank's report predicts a rebound by mid-2024 if the Fed wins the fight against inflation with higher interest rates next year.
In the US stock market, ahead of the announcement of first-quarter earnings on the 26th, the Nasdaq Index of tech stocks plunged 4% from the previous high and plunged 22% from the previous high as selling grew stronger on concerns about an economic slowdown.
The Dow Jones Industrial Average of the New York Stock Exchange (NYSE) fell 2.38% from the previous day.
For international wheat with no substitutes, Russia and Ukraine at war account for an absolute share of 28.9% of global wheat exports.
In the US, growth of 1.0% in the first quarter of this year (compared to the previous quarter, CNN forecast) is predicted to drop sharply from the growth of 6.9% in the fourth quarter of last year.