Various challenges facing the global economy: Rising inflation is villain number one

- Complicated problems created by inflation and rising interest rates for both developed and underdeveloped countries

- Difficult to adopt a definite policy as Federal Reserve officials change statements daily

The global economy is facing many challenges. With the highest inflation in decades, the economic situation has become more difficult in most regions of the world. Given Russia's invasion of Ukraine and the ongoing Covid-19 pandemic, the future looks bleak right now.

Fiscal and fiscal policies provided ample support during the coronavirus pandemic, but demand is falling as these are now being scaled back. Governments now focus on controlling inflation. Thus all other things have become secondary.

The future health of the global economy now depends on the success of monetary policy, the future of the Ukraine war, and what happens next regarding supply disruptions caused by the pandemic. For example, growth in China is forecast to slow from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023.

This would be the weakest position since 2001, barring the global financial crisis and the acute phase of the Covid-19 pandemic. It is significant that the global financial crisis of 2008 and the time of Corona are considered as exceptions.

The first half of 2022 is likely to be weak in the largest economy, i.e. America, which means that the growth rate will be slow. In the second half of 2022, there will be a contraction of the economy in the Euro area and the crisis in China will increase due to the crisis in the property sector and the problems of Corona and the lockdown implemented as a result.

Almost a third of the world's economies are expected to experience negative growth for two consecutive quarters. Global inflation is forecast to rise from 4.7 percent in 2021 to 8.8 percent in 2022, but is expected to decline to 6.5 percent in 2023 and 4.1 percent by 2024.

It is to be noted that the inflationary pressure is higher in developed countries. It is more or less in emerging economies and developing countries.

Current circumstances are completely fluid. In America, on the one hand, inflation is seen decreasing, while on the other hand, employment is also increasing. This fluctuation continues every month and due to this no policy clarity can be brought. As the US dollar continues to strengthen, energy and food price growth will be more marked. Due to increasing debt burden in developing countries, it can be said that there will be a huge strain on the citizens and due to this, the entire global economy will be pushed towards weakness.

To avoid these risks, monetary policy has to rely a lot. However, the inflation picture is not clear and Federal Reserve officials change statements on a daily basis making it difficult to adopt a definite policy.

After 2008, the developed countries have made the inflation rate unbearable by printing notes and they are trying to find a way out of it. The fact that the value of citizens' retirement funds in the United States has fallen by about 23 percent is a major factor in the fact that the world is currently going through an undeclared financial crisis.

It can certainly be said that monetary policy and fiscal policy will remain tight in the near future. Even if we say that there is no outlet without it, it will not be an exaggeration.

In this context, let's take a look at the views expressed by leading economists at the World Economic Forum last September.

He said that in the rest of 2022 and into 2023, growth will remain slow, inflation will remain high and hence the value of wages will decline. Most economists have predicted a global recession.

Global inflation is expected to reach 8.8% in 2022. However, some countries have been more affected than others. Argentina and Turkey have the highest inflation rates in the world.

Following are the key points that characterize the current global situation

* Inflation is rising in most economies of the world.

* There is a real risk of a deep recession in many countries.

* The war in Ukraine has driven up food and fuel prices.

* Among the G-20 countries, Argentina (88 percent inflation rate) and Turkey (85 percent) are experiencing the highest inflation.

* Argentina's inflation problem is getting worse.

* Russian inflation doubled after the invasion of Ukraine, but is now falling.

* Germany, Italy and the UK have double-digit inflation rates. They are struggling to find a solution to this problem. According to the latest figures, inflation in the UK is at a 40-year high.

* Poorer economies, import-dependent countries and countries with poor governance are more at risk.

* Only two factors can bring about an effective solution: increase in interest rates and market-oriented government policies.

* Last month's inflation rate in America was 7.7 percent, but there are many ups and downs.

From the above discussion, it can be said that there is no hope of improvement in the global economy for the first six months of 2023. Also, according to a survey conducted by Bloomberg for 2023, the growth rate is expected to be 2.4 percent next year. In addition, the energy situation in Europe will worsen, the recession in America will deepen and the real estate problem in China will increase.