[imagesource: EPA]

According to the World Bank, in the 72 years since 1950, the world economy has experienced four global recessions: 1975, 1982, 1991, and 2009.

The International Monetary Fund (IMF) and the World Bank characterise a global recession as a year in which the average global citizen experiences a drop in real income.

The last of those, in 2009, has been dubbed The Great Recession and began when the American housing market went from boom to bust.

Thanks, America.

It’s worth noting that the last two-plus years of living in the midst of a global pandemic haven’t done us much favours, either.

This time around, we can largely thank Russian President Vladimir Putin and his fragile ego, with World Bank President David Malpass saying earlier this week that the Russian invasion of Ukraine may well trigger a global recession.

Reuters reports:

Malpass told an event hosted by the U.S. Chamber of Commerce that Germany’s economy, the world’s fourth largest, has already slowed substantially due to higher energy prices, and said reduced production of fertilizer could worsen conditions elsewhere

“As we look at the global GDP … it’s hard right now to see how we avoid a recession,” Malpass said. He gave no specific forecast.

He said the economies of Ukraine and Russia were both expected to see a significant contraction, while Europe, China and the United States were seeing slower growth.

Food stocks, energy supplies, and shortfalls of fertiliser are hitting developing nations especially hard.

No, Eskom, that doesn’t excuse years of corrupt mismanagement.

What else do you have for us, David?

“The idea of energy prices doubling is enough to trigger a recession by itself,” he said.

Grand.

The World Economic Forum has also been going on this week in Davos, Switzerland, and the dreaded ‘r-word’ has been discussed.

Kristalina Georgieva, Managing Director of the IMF, said the “horizon has darkened”. Below from WE Forum:

Georgieva was deeply worried about countries slipping into recession that were already weakened before the pandemic hit, and which rely heavily on imports from Russia for energy and food. But she insisted “we have not seen that yet.”

Jane Fraser, Chief Executive Officer of Citigroup, was also worried when pressed on the situation in Europe:

“There are three or words right now. It’s Russia, its recession and its rates.” Fraser was particularly concerned about the storms Europe is facing – the ongoing supply chain issues and the energy crisis.

There was a sliver of optimism delivered by David M. Rubenstein, Co-Founder and Co-Chairman of The Carlyle Group, who said he doesn’t believe the current economic crisis will be as bad as others in the past 25 years – like the dot-com bubble, the 2009 financial crisis, or the pandemic.

How can we get ourselves out of this mess? The Financial Times has a few ideas:

Naturally, as recession risks rise, the best news for the global economy would be a Russian withdrawal from Ukraine and an end to the zero-Covid strategy in China. This is not in the gift of economic ministers and officials, so instead, they will again have to fine tune their response to the difficult situations they face.

In Europe and emerging economies, this will involve alleviating the consequences of higher food and energy prices — raising benefits and subsidising food and energy in countries with sufficiently strong public finances. The US and UK could accelerate the tightening cycle of monetary policy, while China will seek to limit the negative effects of the Omicron coronavirus wave in China.

No mention of Africa or us down south.

Then again, we tend to exist in a permanent state of crisis so on we roll.

We’ll just hope it doesn’t rain on our coal and we can keep the lights on for 20 or so hours a day.

[sources:reuters&weforum&ft]