The world is sliding into a recession due to multiple overlapping crises, the head of the World Trade Organization said on Tuesday.
Speaking at the opening of the WTO’s annual public forum in Geneva, Ngozi Okonjo-Iweala noted that the World Bank and the International Monetary Fund have both downgraded their global growth forecasts, and that trade indicators are “not looking too good.”
Colliding crises such as surging food prices, the soaring cost of living, and the energy crunch, first triggered by the Covid-19 pandemic and then aggravated by the Russia-Ukraine conflict, have created the conditions for a global recession.
“I think a global recession. That’s what I think we are edging into. But at the same time, we have to start thinking of the recovery. We have to restore growth,” Okonjo-Iweala said.
The former Nigerian finance and foreign minister stressed that as these shocks are “hitting countries at the same time,” radical policies will be needed to revive growth.
“Central banks don’t really have too much of a choice but to tighten and increase interest rates,” she said, admitting that the repercussions on emerging markets and developing countries would be “quite severe.”
The head of the WTO also called on central banks to determine the reasons behind the inflationary crisis, adding that her main concerns were ensuring food security and access to energy.