The head of the World Bank Group issued a serious warning about the financial future of the globe Wednesday.
World Bank Group President David Malpass said during a business event organized by the US Chamber of Commerce that he felt it was difficult to “see how we avoid a recession,” according to the BBC. (Disclosure: David Malpass is married to Daily Caller News Foundation President Adele Malpass).
Several factors contributed to Malpass’s dire warning, including coronavirus lockdowns in China, dependence on Russian oil and gas, shortages in fertilizer, food and energy in the developing world, the BBC continued. “As we look at the global GDP [Gross Domestic Product] … it’s hard right now to see how we avoid a recession,” Malpass said, according to the BBC.
GDP took an unexpected nosedive in April, shrinking for the first time since the start of the pandemic.
‘Put On Your Seat Belts On’: BlackRock President Warns Of Massive Shortages Due To Inflation https://t.co/ZbFkqFkrHm
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“The idea of energy prices doubling is enough to trigger a recession by itself,” he continued, the outlet noted. Malpass stated that many European countries, particularly Germany, were too dependent on Russia for oil and gas, the BBC reported, likely in reference to the ongoing war started by Russian President Vladimir Putin.
He also raised significant concerns about the ongoing lockdowns throughout China’s major cities, the BBC noted. The lockdowns in Shanghai, China’s financial, manufacturing and shipping hub, is “still having ramifications or slowdown impacts on the world,” Malpass continued according to the BBC. (RELATED: Man At The Center Of US Inflation Woes Just Got His Job Back)
“Then the waves of Covid caused lockdowns which further reduced growth expectations for China,” Malpass added. China’s premier Li Kequiang said Wednesday that China, the world’s second largest economy, had been hit even harder by the latest round of lockdowns than it had in 2020, the BBC noted.
The measures taken by China, where “only 30% of business have reopened” in some provinces, have led to a sharp slowdown in economic activity, according to Li Kequiang, the BBC continued.
The World Bank cut global economic growth forecasts for 2022 by almost an entire percentage point, to 3.2%, the outlet continued. Malpass’ comments echo fears shared by Bank of America earlier in May and BlackRock President Rob Kapito, who said that inflation is likely to lead to shortages in labor and raw materials.