Ryan Stefancin:
World Leaders Meet as Global Economy Faces Multiple Threats
One of the strongest vocal points in economic news today is the everyday change in inflation rates. Currently we have and inflation rate of 8.2%, which is important to recognize as concerning. However, there are other issues that concern the growth of the global, and U.S. economy. As we know there has been a large increase in price of oil/gas over the last year or so partially due to the conflict between Russia and Ukraine which limited the supply of oil. Hence an increase in prices of oil. It is important to understand that prices in any economy are larger dependent on the price of oil. If the price of oil is up, so are the prices of many other goods in the economy. In other words, the increase of the price of oil is one of many factors in the large rate of inflation in today's economy. President Biden attempts to combat this high price of oil through a broker agreement which would help markets escape debt. This would not only combat inflation and prices of oil but would also decrease the price of grains, rice and other staple food items that poorer countries tend to rely on. The federal reserve is also doing their part in terms of raising interest rates in order to lower the rate of inflation.
The current conflict between Russia and Ukraine are directly responsible for the economy downfall in not just the U.S. but in other parts of the world. Recently world leaders had met at the world Summit meeting where the worlds 20 leaders gather in effort to resolve conflicts such as this one. During the summit President Volodymyr Zelensky of Ukraine had reported that Ukraine would not pull its troops out and tame their resistance until their territory was fully restored. Vladimir Putin, President of Russia was not in attendance of this meeting. The opinions of the Chinese Foreign Ministry and China's leader, Xi Jinping state that "all countries should replace division with unity". Although not directly quoting the conflict between Russia and Ukraine, it is the understanding that he was referring to that directly. This resolve in conflict is seemingly important to China due to the strong partnership they have with Russia. It is noticeable in the most recent International Monetary Fund (I.M.F) data that suggests that China has grown at a rate of 3.2% in 2022 but is expected to only grow at a rate of 2.7% in 2023. Along with the decrease in china's numbers, it is apparent that Britain is currently in a recession based on new GDP reports.
It is very clear in this article that although there are a few major problems in many economies, that they all stem from the much larger issue of inflation. In this case, inflation is the fuse and the closer it gets to the bottom the more problems that arise with it. President Biden and the federal reserve are doing all they can in hopes to combat this and hopefully this diminishes the other issues in the economy concurrently.
https://www.nytimes.com/2022/11/15/business/economy/world-leaders-meet-as-global-economy-faces-multiple-threats.html
Inflation is typically the main economic issue discussed concerning the state of the economy, but its important to take into account other factors impacting it like you have mentioned. Europe is facing an energy crisis due to the Russian-Ukraine conflict and are expected to face extremely high and unaffordable prices this winter. All countries, but especially those in Europe, are in for tough times this coming winter between energy prices and high inflation.
ReplyDeleteThe increase in the price of oil effecting other prices is directly effecting most things in all economys across the country and I like how you explain how the high inflation rates are due to the increase in oil prices which effect other prices which ties back to Russia and Ukrine. Facing this crisis has brought on not only problems to our country but we also see that it effected all other countries and this was all impacted by russia and Ukraines problems and how it all ties back to that.
ReplyDeleteThe high inflation has been a prominent issue in the economy as of late, do you think that inflation rates may come down anytime soon?
ReplyDeleteI'd be really interested to see how the war in Ukraine has specifically affected the Russian economy. Global economies are clearly suffering as a result, but what about the Russia itself. Financing a war is not cheap and with sanctions placed on Russia by so many nations I wonder how it is affecting their economy.
ReplyDelete