Biden adviser grilled by host on fears of 'recession'
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Robin Brooks, Chief Economist at the Institute of International Finance, pointed to new figures which suggest the manufacturing sector is facing severe difficulties. It is suffering as a result of numerous factors, including government-imposed lockdowns and, more recently, the war in Ukraine.
Looking at these figures, Mr Brooks concluded that “global recession is coming”.
He wrote in a post on Twitter: “The forward-looking orders – inventories measure in the global manufacturing [Purchasing Managers’ Index, which is used as an indicator of business conditions] is already half as negative for Poland as during the first Covid wave in 2020.
“The same is true for Germany.”
Mr Brooks added: “Global manufacturing is grinding to a halt…”
This came after International Monetary Fund (IMF) Managing Director Kristalina Georgieva said the global economy has “darkened significantly” in recent months.
The IMF head warned the world faces an increasing risk of recession in the next year.
A recession is traditionally defined as a decline in gross domestic product for two consecutive quarters.
That is, an economy which shrinks for at least half a year.
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The White House has, however, recently received some flack for “redefining” the term to create the appearance of a more sturdy economy.
US Treasury Secretary Janet Yellen late last month said “we are not in a recession now” even if GDP declines for a second quarter because “that’s not the technical definition”.
National Review Institute Fellow Dan McLaughlin responded in the New York Post that this was simply “spin”.
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He added: “It’s like a three-card-monte dealer looking you in the eye and saying, ‘That’s not the queen’.”
Ms Georgieva, quoted in the Guardian, said the commodity price shock from the Russian invasion of Ukraine had exacerbated the cost-of-living crisis for hundreds of millions of people.
The situation, she added, was “only getting worse”.
The IMF head noted: “The outlook remains extremely uncertain.
“Think of how further disruption in the natural gas supply to Europe could plunge many economies into recession and trigger a global energy crisis. This is just one of the factors that could worsen an already difficult situation.
“It is going to be a tough 2022 – and possibly an even tougher 2023, with increased risk of recession.”
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