World Bank president worries about the chances of stagflation in the global economy. Unless the larger economies enhance their production level, these scenario is tough to change.

Powell said lowering the rate of inflation to a level of 2%  is the prime target of the world’s central banks. However, it can create a negative effect on consumers as well as on the business.

Several reasons have contributed to the downfall of the global economy today. First, global Economic expansion may slow down from 3.6% to 3.2% this year. The chances of Chinese economic downfall are higher in the upcoming years.

Reasons For Stagflation In Global Economy

Several reasons have contributed to the stagflation in the global economy. Let’s find out some of the core reasons behind it to understand it better. The world economy has been facing various issues for the last few months.

  • After COVID-19 hit, the economy suffered some significant financial losses. Following that, the Russia -Ukraine War has contributed further damage to the world economy. 
  • US inflation rate has become higher than 8% which is not a good indicator for the world economy.
  • China’s Shutdown is contributing to the increased chances of Stagflation in the world economy.
  • No country is stepping up to provide the gas supply to the European nations, the sole importer from Russia.
  • Blockages in the global economy are proving a hindrance to developing the world’s economy.

Hence, these are some of the crucial factors contributing to the economy’s downfall. Therefore, you must consider these facts on your end when you want to improve your knowledge of stagflation reasons in the global economy.

Developed nations of the world cannot adequately contribute to the growing needs of the world economy properly. The world cannot find out an alternative solution to these problems. Practical efforts need to be made.

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Arnab Das is a passionate blogger who loves to write on different niches like technologies, dating, finance, fashion, travel, and much more.

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