Balazs Coranyi and Dan Burns

DAVOS in Switzerland (Reuters) – Multiple threats to global economies topped the list of worries expressed by the wealthy at Monday’s Davos thinkfest. Some warned of a worldwide economic recession.

The backdrop for the World Economic Forum is inflation at its highest point in over a decade in many major economies, including Europe and the United States.

These price increases have eroded consumer confidence, and shaken world financial markets. This has prompted central banks such as the U.S. Federal Reserve (the Federal Reserve) to increase interest rates.

The gloomy situation has been exacerbated by the negative effects on the oil and food markets from Russia’s February invasion of Ukraine – described in Moscow as a “specially military operation”. COVID-19 lockdowns of China without clear ends and the Russian Invasion of Ukraine (February), which Moscow calls a “specially military operation.”

We have four different crises that are connected. High inflation… energy crisis… food insecurity… and a climate crisis. Robert Habeck, German Vice-Chancellor said that we cannot solve all the problems by focusing on just one problem.

Habeck spoke out during a WEF panel discussion, “But if no of these problems are resolved, I’m afraid we’re running to a global recession that has tremendous effects..on global stability.”

Last month, the International Monetary Fund (IMF), cut its global growth outlook by 2%. It cited the conflict in Ukraine as well as the “clear and immediate danger” of inflation for many countries.

TIPPING POINT

Christine Lagarde from the European Central Bank (ECB), who will be speaking in Davos, Tuesday, warned that both growth and inflation are going against each other as rising price pressures reduce economic activity, devastate household purchasing ability, and put an end to all hope.

“The Russia-Ukraine war may well prove to be a tipping point for hyper-globalisation,” she said in a blog post on Monday.

Lagarde said that this could cause supply chains to become less efficient over time and increase cost pressures on the economy during transition.

Yet, she promised to increase rates in September and July to stop inflation. This is despite rising borrowing costs that will inevitably impact on growth.

The economic impact of the Ukraine crisis on Europe is most acutely felt, but the U.S. is feeling the highest price pressures.

From near zero in 2002, the Consumer Price Index soared to an all-time high of 8.5% for March. This is a forty year record. In response, the Fed announced its 22-year-old largest rate rise and Chairman Jerome Powell indicated that a comparable increase – half a point – would be made at its next two meetings.

However, the higher interest rates and increased expectations of more have not slowed consumer spending or dragged down the red-hot U.S. labor market.

Anthony Capuano (NASDAQ:) Inc chief executive, said that the danger of recession was not imminent. “There is still a high demand.”

China and other key emerging markets are expected to continue growing this year even though they may be experiencing slower growth than originally estimated.

Marcos Troyjo (president of the New Development Bank), which is a joint venture between Brazil, India China, South Africa, China and South Africa was able to say that his bank continues to expect “robust” growth in China, India and Brazil this year.