World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala predicted at the opening of the organization’s annual public forum in Geneva a “global recession” as the world is in the grip of “multiple crises”.
If, according to her, the organization had previously expected a “post-pandemic recovery”, the cards have been reshuffled. “Now we have to deal with what looks like an approaching recession,” she said, adding, “I think that’s where we’re headed. But at the same time, we have to start thinking about recovery. We need to restore growth. »
She stressed that the situation was “very difficult” with multiple crises: insecurity, climatic shocks, rising food prices. These are all “simultaneous exogenous shocks” that weaken the world, for the boss of the WTO.
OECD also pessimistic
Beyond this observation, Ngozi Okonjo-Iweala invites us to “reflect on what we must do, on the policies we must carry out to restore growth”. In the short term, his first concern is “how to ensure food security” in the world. It has also been concerned with questions of access to energy.
Commenting on the increase in key rates, the patron of the WTO said that “central banks have no real choice” but to increase them because of inflation. But she pointed out 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.
Already on Monday, the Organization for Economic Co-operation and Development (OECD) announced that it had significantly downgraded its global growth forecast for next year.