A UNCTAD report entitled “Trade and Development Report 2022” warned of the global economy entering a recession, calling for urgent changes in current global policies to reverse this path.
He pointed out that sharply raising interest rates by some of the leading central banks threatens to reduce growth further, as well as making conditions more difficult for households, companies and governments.
The report revealed that all regions of the world will be affected, that developing countries are the most affected, and that 60 percent of low-income countries are experiencing debt distress or on the verge of it.
The UNCTAD report stressed that there is still time to avoid a recession, recommending international financial institutions to urgently increase liquidity and expand debt relief, and also called on advanced economies to reduce monetary policy tightening and focus efforts on reducing food, energy and fertilizer prices, increasing support for vulnerable groups, and using Target price controls, corporate profits taxation and increased investment in social protection, noting that it is a matter of political will.
He added that the movements of monetary and fiscal policies in advanced economies are pushing the world towards a prolonged stagnation, warning that at a time of deteriorating real wages and insufficient multilateral international coordination, monetary tightening could lead to stagnation and instability for many developing countries and some developed countries. That higher interest rates in the United States within a year would reduce the future income of developing countries – excluding China – by about $ 360 billion.
The report revealed that 90 developing countries witnessed a weakening of their currencies against the dollar, and a third of them had reduced foreign exchange reserves.
45 developing countries are currently exposed to multiple economic shocks, in addition to 48 other countries that are exposed to serious crises, which threatens a global debt crisis, calling for an increase in official development assistance and debt restructuring.
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