World Bank President David Malpass walks during the official welcome ceremony of G7 leaders and Outreach guests at Castle Elmau in Kruen, near Garmisch-Partenkirchen, Germany, on Monday, June 27, 2022. (AP Photo/Markus Schreiber)
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UPDATED 2:00 PM PT – Monday, June 27, 2022
World Bank President David Malpass said the global economy will significantly slow down due to high inflation, which will cause political problems in a number of countries. In an interview Sunday, Malpass said the US and it’s allies need to increase production of goods and services, while keeping their economies open and not restrict international trade.
His remarks followed anti-Russian sanctions earlier this year that caused problems in the global energy, food and capital markets. He claimed the western world is facing an economic crisis.
“It’s a sharp slowdown, including even China,” he said. “We’ve seen the world growth fall by half since January in terms of GDP growth, but there’s also shortages, there’s inflation.”
Happy to speak with @POTUS @JoeBiden, @JPN_PMO @Kishida230, @10DowningStreet @BorisJohnson, @CanadianPM @JustinTrudeau & many others.
Grateful for @G7 countries’ strong support for the @WorldBank Group as we work to help countries address overlapping global crises. [2/2] pic.twitter.com/O6oMBqaa3A
— David Malpass (@DavidMalpassWBG) June 27, 2022
Malpass voiced that central banks should change their policies and regulations to encourage more production of everything, which may alleviate the hardship. He believes record inflation and shortages of key commodities like oil, fertilizer and wheat mean “it’s going to be very hard” for some countries to avoid recession.
” It’s possible to produce enough to soften that crisis, but at the rate that we’re going right now the fertilizer isn’t being made,” he stated. “A giant source of fertilizer is from natural gas, through the ammonium channel into the most useful fertilizer. It also is used to make the electricity that converts the minerals into fertilize and that’s just not happening. A lot of the world is shutting down for lack of fertilizer and then those shortages of crops will last for multiple years.”
The World Bank President admitted that a recession in the US isn’t out of the question, but he doesn’t disagree with estimates that put the risk of a recession in the US as high as 5o percent.