World Bank Cites Ukraine, Inflation & Supply Issues As Recession Risks
In its latest Global Economic Prospects report issued today, the World Bank warned that many countries are at severe risk of a “major recession” in the wake of the violence in Ukraine, inflation and supply-issues. In particular, the World Bank noted that less developed nations in Europe and Asia are facing elevated risks.
Inflation Likely to Persist
In the report, the World Bank noted: "The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth. For many countries, recession will be hard to avoid." Looking ahead, the outlook is not positive with report going on to say that "Subdued growth will likely persist throughout the decade because of weak investment in most of the world. With inflation now running at multi-decade highs in many countries and supply expected to grow slowly, there is a risk that inflation will remain higher for longer."
Global Growth Outlook Downgraded
The bank’s global growth projection has now been reduced to 2.9% from 4.1% in January, in light of these risks. In the US, the World Bank expected 2022 growth of 2.5%, down from the prior 3.7% projection. China also saw its growth outlook slashed to 4.3% while the Eurozone is forecast to see growth of 2.5%, down from the prior 4.2% projection. Notably, the report concluded that: “Even if a global recession is averted, the pain of stagflation could persist for several years -- unless major supply increases are set in motion.”
Technical Views
MSCI World Index Fund
The recovery in the index off the 110.27 lows has seen price trading back up into the middle of the bearish channel which has framed the sell-off this year. Price is currently caught around the 117.91 level, which marks the March and February lows. With both MACD and RSI bullish, however, the focus is on a further push higher with 122.06 and the channel highs the next resistance levels to note. Failure at the current level, however puts the focus on further downside and a resumption of the bear trend.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.