Jakarta, CNBC Indonesia – Signs of a recession are beginning to spread to countries around the world. After the United States (US), the threat of a weakened economy also began to cover Europe.
This was stated directly by the CEO of Citi, Jane Fraser, on the sidelines of the World Economic Forum (WEF) in Davos, Switzerland, Monday (23/5/2022). Fraser said a confluence of factors, including the war in Ukraine and the resulting energy crisis, had left Europe vulnerable to a significant decline.
“Europe is in the midst of a storm from the supply chain, from the energy crisis, and it is clearly close to some of the atrocities happening in Ukraine,” he said Geoff Cutmore. CNBC InternationalMadi.
Energy commodity prices in Europe have risen in recent months amid Russian sanctions. This is also exacerbated by inflation rates that trigger the cost of living crisis.
With this situation, Fraser even said that the US has more resistance than Europe. Even so, Uncle Sam’s country today is highly dependent on the Fed’s strategy of raising interest rates.
“There’s some buffer there to see if it was used wisely or not,” he added.
The European Central Bank (ECB) on Friday also gave its strongest indication but will soon start raising interest rates in July. Previously, the banking institution even insisted that price pressure would ease in the second half of this year.
Previously, the recession issue has also been heard in the United States since April 2022. A number of analysts, including institutions such as Deutsche Bank, have put it forward.
Recently, citing the same page, this was said by former SEC chief economist who is also an academic at the University of Southern California Marshall School of Business, Larry Harris. He even mentioned that a recession was “necessary” to win the current high inflation rate.
“Are we (US) entering a recession? Likely. It is very difficult to stop inflation without a recession.” he said as quoted CNBC InternationalMonday (23/5/2022).
A recession is a period when there is a decline in the wheels of the economy, which is marked by a weakening of domestic product (GDP) for two consecutive quarters. The KBBI defines a recession as a sluggishness in trade, industry, and so on.
War becomes a boomerang, Russia predicts severe recession
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