According to a poll, three quarters of global business executives foresee a worldwide recession in the next 12 to 18 months as a result of Russia’s terrible conflict in Ukraine.
According to the survey, the clear majority of CEOs believe that economic deterioration is impending or has already begun in nations throughout the world as a result of the destructive invasion.
However, managers are terrified that the consequences might be considerably worse, since many fear a cyberattack by tyrant Vladimir Putin.
Meanwhile, they predicted that the conflict would continue to wreak havoc on businesses and employees throughout the world, exacerbated by a worldwide cost-of-living crisis brought on by surging inflation.
Despite economists’ concerns, Joe Biden sought to downplay the likelihood of a recession by stating it was ‘not inevitable.’
Instead, the President moved the attention to Americans’ mental health, saying that the pandemic had made people’truly, really sad.’
His remarks came after the Federal Reserve raised interest rates by 0.75 percentage point earlier this week.
The extreme action prompted a tumultuous week on Wall Street, as the stock market responded with trepidation.
According to the Conference Board report, up to 76% of CEOs throughout the world predict or believe their areas are already in a recession.
The report, which polled 750 CEOs, shows a significant shift from a year ago, when only 22% projected an economic downturn.
‘We need to be prepared for harsher times,’ said Ilham Kadri, CEO of Solvay SA, a chemical company located in Brussels, to the Wall Street Journal.
Russia’s attacks on Ukraine, as well as supply chain concerns and Covid, according to Paul Knopp, CEO of KPMG US, are ‘causing some uncertainty in terms of the forecast.’
‘Any time you see energy costs—and the impact it has on cost of products and transportation—those fundamentals, obviously, from an economic sense, matter,’ said George Oliver, CEO of Johnson Controls International PLC.
Most company leaders are concerned that rising energy prices will have a significant impact on their operations, with increased transportation costs driving up the cost of goods.
Some companies, such as Facebook’s parent company Meta, have already reduced recruiting in anticipation of a difficult future.
‘Historically high oil costs, increased supply chain disruptions, heightened geopolitical concerns, and weakening consumer confidence are all exerting downward pressure on global GDP,’ said Dana Peterson, Chief Economist at The Conference Board.
‘This is on top of China’s lockdowns and the war in Ukraine’s cascading repercussions.’
‘These disruptions, together with restrictive monetary and fiscal policy decisions, are boosting recession forecasts, with nearly eight out of ten CEOs anticipating a recession in their major region of operations over the next 12 to 18 months, if one is not already begun.’
The poll was conducted in May, just before the Fed raised interest rates by 0.75 percent, but at a time when the war in Ukraine was already wreaking havoc throughout the world.
Last night, Biden made another barely disguised attempt to deflect accountability for the US economy’s calamity.
He said that Americans are’truly, very depressed’ as a result of record inflation and the pandemic’s aftermath, but that a recession is ‘not inevitable.’
In a 30-minute interview – his first official one since February – he made the statements, calling NBC reporter Lester Holt a “smart person” for his inflation remarks.
The President scoffed at Republican lawmakers’ accusations that last year’s Covid assistance package was entirely to blame for inflation hitting a 40-year high, describing the claims as “bizarre.”
‘People are really, truly sad,’ Biden observed of the general American mood.
‘They’re in a lot of trouble,’ he remarked. ‘The demand for mental health services in America has surged as a result of the upheaval that has engulfed the country.
‘Everything they’ve planned has turned out to be a disaster.’ But the majority of it is the result of what has occurred, specifically the COVID problem.’
The interview heralded the start of a fresh push to spread his economic message. Biden also addressed reports that the United States is on the verge of a recession.
‘First and foremost, it is not unavoidable,’ he stated. ‘Secondly, we have a better chance than any other country in the world of overcoming inflation.’
With the 3.6 percent unemployment rate and America’s relative strength in the globe, the president expressed hope.
‘Be confident,’ Biden added, ‘because I am confident that we are better positioned than any country in the world to own the second quarter of the twenty-first century.’ ‘That isn’t exaggeration; it is fact.’