World Bank Warns Middle East Conflict Could Lead To $150 A Barrel

 

BBC: World Bank warns oil prices could reach $150 a barrel 

Oil prices could rise to more than $150 a barrel if the conflict in the Middle East escalates, according to the World Bank. 

A drawn-out war in the region could drive big rises in energy and food prices, just a year after prices spiked due to the Russian invasion of Ukraine. 

For now oil prices remain steady at around $90 a barrel and are predicted to fall. 

However, the Bank warns that this outlook could quickly reverse. 

Under its worst case scenario, the World Bank said a situation could develop that was comparable with the oil crisis of the 1970s, which would could push oil prices up to between $140 and $157 a barrel.  

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WNU Editor: The World Bank report is here .... Conflict in Middle East Could Bring ‘Dual Shock’ to Global Commodity Markets (World Bank). 

World Bank Warns Middle East Conflict Could Lead To $150 A Barrel  

Oil prices could reach ‘uncharted waters’ if the Israel-Hamas war escalates, the World Bank says -- AP  

Oil prices could hit $150 if Israel-Hamas conflict intensifies, World Bank -- Financial Times  

World Bank warns Middle East conflict could lead to spike in fuel prices -- UPI  

World Bank warns conflict in Middle East could deliver a dual shock to commodity markets -- CNN

World Bank Warns Of Global Recession

Bloomberg: World Bank to Warn of Global Recession Risk in Economic Outlook 

(Bloomberg) -- The World Bank is concerned that “further adverse shocks” could push the global economy into recession in 2023, with small states especially vulnerable. 

The warning is contained in an abstract for the bi-annual “Global Economic Prospects” report due for release on Tuesday and visible on the group’s Open Knowledge Repository website. 

Even without another crisis, global growth this year “is expected to decelerate sharply, reflecting synchronous policy tightening aimed at containing very high inflation, worsening financial conditions, and continued disruptions from Russia’s invasion of Ukraine,” the World Bank said.

“Urgent global and national efforts” are needed to mitigate the risk of such a downturn as well as debt distress in emerging market and developing economies (EMDEs), where investment growth is expected to remain below the average of the past two decades, the Washington-based lender said.  

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WNU Editor: The IMF is also predicting a severe economic recession .... IMF Gives A Gloomy Forecast For The Global Economy In 2023 (January 1, 2023).

Heads Of The IMF And World Bank Warn (Again) Of A Rising Risk Of A Global Recession

 

Bloomberg: IMF, World Bank Warn of Increasing Risk of Global Recession 

(Bloomberg) -- The heads of the International Monetary Fund and World Bank warned of a rising risk of a global recession as advanced economies slow and faster inflation forces the Federal Reserve to keep raising interest rates, adding to the debt pressures on developing nations. 

In the US, the world’s largest economy, the labor market is still very strong but is losing momentum because the impact of higher borrowing costs is “starting to bite,” IMF Managing Director Kristalina Georgieva said Monday. 

The euro zone is slowing as natural gas prices soar, as is China due to Covid-19 disruptions and volatility in the housing sector. The IMF calculates that about one-third of the world economy will have at least two consecutive quarters of contraction this year and next, and that the lost output through 2026 will be $4 trillion.  

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WNU Editor: The IMF and the World Bank are not the only ones who are raising concerns abut a global recession .... ‘This is serious’: JPMorgan’s Jamie Dimon warns U.S. likely to tip into recession in 6 to 9 months (CNBC).

 Heads Of The IMF And World Bank Warn (Again) Of A Rising Risk Of A Global Recession  

World Bank's Malpass, IMF's Georgieva see rising risks of global -- Reuters  

IMF, World Bank leaders warn of growing risk of global recession -- The Hill  

IMF and World Bank warn of recession next year -- RTE  

$6.4 trillion hole: IMF, World Bank warn of global recession -- The AGE  

Global economy faces recession in 2023 say heads of IMF and World Bank -- TASS

World Bank Warns Of Global Recession

BBC: World Bank: Global rate hikes could trigger 2023 recession 

Interest rate hikes by central banks around the world could trigger a global recession in 2023, the World Bank has said. 

Central banks have raised rates "with a degree of synchronicity not seen over the past five decades" to tackle soaring prices, it said. 

 Raising rates makes borrowing more expensive to try to bring down the pace of price rises. 

But it also makes loans more costly, which can slow economic growth. 

The warning from the World Bank comes ahead of monetary policy meetings by the US Federal Reserve and Bank of England, which are expected to increase key interest rates next week.  

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WNU Editor: If you use the metrics that were used in the past to measure inflation, unemployment, and economic growth, the data would say that we have been in a recession since this summer. 

World Bank Warns Of Global Recession  

Risk of Global Recession in 2023 Rises Amid Simultaneous Rate Hikes -- World Bank  

World Bank warns higher interest rates could trigger global recession -- The Guardian/Reuters  

Global Recession Looms Amid Broadest Rate Hikes in Five Decades, World Bank Says -- Bloomberg  

World Bank forecast indicates possible global recession in 2023 -- UPI  

The World Bank warns the risk of a ‘global recession’ is rising as central banks worldwide raise rates simultaneously -- Fortune  

How central banks are risking a global recession -- Axios

World Bank Says The Ukraine War Will Cause The Biggest Global Commodity Price Shock In 50 Years

BBC: Ukraine war to cause biggest price shock in 50 years - World Bank 

The war in Ukraine is set to cause the "largest commodity shock" since the 1970s, the World Bank has warned. 

In a new forecast, it said disruption caused by the conflict would contribute to huge price rises for goods ranging from natural gas to wheat and cotton. 

The increase in prices "is starting to have very large economic and humanitarian effects", Peter Nagle, a co-author of the report, told the BBC. 

He said "households across the world are feeling the cost of living crisis". 

"We're particularly worried about the poorest households since they spend a larger share of income on food and energy, so they're particularly vulnerable to this price spike," the senior economist at the World Bank added.  

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WNU Editor: To be fair prices were already exploding before the Ukraine war. Explosive budget deficits and spending, supply chain breakdowns, and covid lock-downs crippled the economy. The war and the decision to impose sanctions on Russia has only made this crisis worse. 

The World Bank report is here .... Commodity Markets Outlook (World Bank). 

World Bank Says The Ukraine War Will Cause The Biggest Global Commodity Price Shock In 50 Years  

World Bank forecasts worst stagflation since 1970s amid Ukraine war -- UPI  

World Bank forecasts war in Ukraine will cause ‘largest commodity shock’ since 1970s -- The Hill  

Ukraine war ‘will mean high food and energy prices for three years’ -- The Guardian  

World Bank Sees High Energy Prices For Years After Russia’s War In Ukraine -- OilPrice.com

World Bank President Says The War In Ukraine Is "A Catastrophe" For The World. Expects The War Will Cut Global Economic Growth

David Malpass says "it's too early to say" if the war in Ukraine will lead to a global recession  

BBC: Ukraine war is economic catastrophe, warns World Bank 

The war in Ukraine is "a catastrophe" for the world which will cut global economic growth, the president of the World Bank has told the BBC. 

"The war in Ukraine comes at a bad time for the world because inflation was already rising," said David Malpass. 

He stressed his biggest concern is "about the pure human loss of lives" that is occurring. 

Thousands of civilians and soldiers are thought to have been killed by the fighting. 

Mr Malpass said the economic impact of the war stretches beyond Ukraine's borders, and the rises in global energy prices in particular "hit the poor the most, as does inflation". 

Food prices have also been pushed up by the war, and "are a very real consideration and problem for people in poor countries".  

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WNU Editor: The World Bank has halt all programs in Russia and Belarus .... World Bank halts programs in Russia, Belarus (Axios). More here .... World Bank ends programs in Russia and Belarus (The Hill).

The World Bank and the IMF are providing $5 billion in emergency funding to Ukraine .... Russia-Ukraine crisis: World Bank, IMF to fund Ukraine with over $5 billion (Nairametrics).

World Bank Says Coronavirus Pandemic Morphing Into 'Major Economic Crisis'

FOX News: Top World Bank economist says coronavirus pandemic morphing into 'major economic crisis'

'This is a war,' said Carmen Reinhart 

The top economist at the World Bank said in an interview on Thursday that the coronavirus pandemic is “morphing into a major economic crisis” and questioned the wisdom of central banks increasing their sway over the bond market. 

“This did not start as a financial crisis but it is morphing into a major economic crisis, with very serious financial consequences,” World Bank Chief Economist Carmen Reinhart told Bloomberg. 

"There’s a long road ahead." She said the “longer the uncertainty, the longer the pandemic works its way through the global economy, the bigger the balance sheet damage." 

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WNU Editor: The economic impact on the global economy because of the Covid-19 pandemic is something that I am trying to game out. And it is hard to do it. The reason why is because the pandemic shows no signs in ending, and in many cases it looks like it is getting worse. But I do know one thing. The huge debt levels that governments, companies, and individuals have accumulated are going to take a long time to clear, and that it is going to impact each and everyone of us in our pocketbook. We could be at the cusp of living in in a depressed economy for the next 5 years.

World Bank Report: The Covid-19 Pandemic Has Pushed 38 Million Back Into Poverty In East Asia

The World Bank said the East Asia and the Pacific region this year is projected to grow by only 0.9 per cent, the lowest rate since 1967. Photo: Reuters

CNBC: East Asia poverty could rise for first time in 20 years due to the pandemic, World Bank says

* The number of people living in poverty in developing East Asian and Pacific countries could increase for the first time in 20 years, a World Bank forecast showed on Monday.
* The bank said as many as 38 million more people could fall below below the poverty line this year, including 33 million who would have escaped poverty if the Covid-19 shock didn’t happen.
* World Bank defined the poverty line as income of $5.50 a day.

SINGAPORE — The number of people living in poverty in developing East Asian and Pacific countries could increase for the first time in 20 years, as the coronavirus pandemic erased much of this year’s economic growth, a World Bank forecast showed on Monday.

The bank defined the poverty line as income of $5.50 a day. It said as many as 38 million more people could fall below that income level this year, including 33 million who would have escaped poverty if not for the Covid-19 shock.

That World Bank forecast was published in an economic update for the region, which includes China, Southeast Asian countries and the Pacific Islands, such as Fiji and Samoa. The report doesn’t include India and other South Asian countries.

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More News On The Covid-19 Pandemic Pushing 38 Million Back Into Poverty In East Asia

China’s economic growth to be 2 per cent in 2020 but coronavirus to keep Asia’s growth at lowest since 1967, World Bank warns -- SCMP/Reuters
Covid-19 pandemic will push millions across East Asia and the Pacific into poverty this year, says World Bank -- Straits Times
Coronavirus pushes 38m Asians below poverty line: World Bank -- Nikkei Asia Review
Pandemic sparks rise in Asian poverty for first time in 20 years -- The Telegraph
East Asia poverty to rise for first time in 20 years due to Covid-19 pandemic – World Bank -- RT
Southeast Asian Economies Face Generational Downturn from COVID-19 -- The Diplomat

World Bank Warns The Global Economic Recovery Could Take "Five Years"

Zero Hedge: World Bank Warns Recovery Could Take "Five Years"

Global economic activity around the world has stabilized in mid-September, though far below pre-COVID-19 levels as recoveries risk reversing if monetary and fiscal stimulus is not continued at rates seen in the first half of 2020. We noted Wednesday, a new OECD report offered some hope the global downturn is not as severe as previously thought but is still viewed as an "unprecedented" decline.

We also noted the OECD report is problematic for policy-makers who have unleashed easy-money policies during the pandemic to artificially inflate economies and boost risk assets, as policy support in the second half of the year might not be as great as what was seen earlier in the year (as is currently playing out in Washington with the prospect of a slimmed-down stimulus bill getting slimmer).

So with waning support from central banks and fiscal stimulus from governments, the quick rebound seen in the global economy has likely stalled, and the shape of the recovery will no longer resemble a "V" but more of a "W" or "U" or "L."

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WNU Editor: There is still a lot of unknowns. If a second Covid-19 wave results in another shut-down that may last until spring .... it is going to take more than five years for a economic recovery to take place.

World Bank Says Pandemic Has Sparked The Broadest Economic Collapse Since 1870

AFP: Pandemic drives broadest economic collapse in 150 years: World Bank

Washington (AFP) - The coronavirus pandemic inflicted a "swift and massive shock" that has caused the broadest collapse of the global economy since 1870 despite unprecedented government support, the World Bank said Monday.

The world economy is expected to contract by 5.2 percent this year -- the worst recession in 80 years -- but the sheer number of countries suffering economic losses means the scale of the downturn is worse than any recession in 150 years, the World Bank said in its latest Global Economic Prospects report.

"This is a deeply sobering outlook, with the crisis likely to leave long-lasting scars and pose major global challenges," said World Bank Group Vice President for Equitable Growth, Finance and Institutions Ceyla Pazarbasioglu.

The depth of the crisis will drive 70 to 100 million people into extreme poverty -- worse than the prior estimate of 60 million, she told reporters.

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More News On The World Bank Saying The Pandemic Has Sparked The Broadest Economic Collapse Since 1870

Coronavirus: World Bank confirms deepest recession since World War Two -- UN News
Pandemic sparked broadest economic collapse since 1870, World Bank says -- The Hill
World Bank says the global economy will shrink by 5.2% this year -- CNN
World Bank warns Covid-19 pandemic risks dramatic rise in poverty -- The Guardian
World Bank: COVID-19 to contract global economy by 5.2% this year -- Yahoo News

Why Is The World Bank Still Offering Low Interest Loans To China?

The Straits Times: Trump calls for World Bank to stop loaning to China

WASHINGTON (REUTERS) - US President Donald Trump on Friday (Dec 6) called for the World Bank to stop loaning money to China, one day after the institution adopted a lending plan to Beijing over Washington's objections.

The World Bank on Thursday adopted a plan to aid China with US$1 billion (S$1.36 billion) to US$1.5 billion in low-interest loans annually through June 2025. The plan calls for lending to "gradually decline" from the previous five-year average of US$1.8 billion.

"Why is the World Bank loaning money to China? Can this be possible? China has plenty of money, and if they don't, they create it. STOP!" Trump wrote in a post on Twitter.

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WNU Editor: This is just another example on how international institutions are not capable of adjusting to real world situations. Kudos to President Trump for pointing out the obvious.

IMF And World Bank Working Together To Assist Oil Exporting Nations From Going Into Default

Financial Review/Financial Times: IMF and World Bank move to forestall oil-led defaults

Officials from the International Monetary Fund and the World Bank are heading to Azerbaijan to discuss a possible $4bn emergency loan package in what risks becoming the first of a series of bailouts stemming from the tumbling oil price.

The Baku visit, which follows a currency crisis triggered by the collapse in crude, comes amid concern at the two global institutions over emerging market producers from central Asia to Latin America.

The fund and the bank have also been monitoring developments in other oil-producing countries such as Brazil, which is now mired in its worst recession in more than a century, and Ecuador. The oil-driven crisis in Venezuela has even raised the possibility of repaired relations between the fund and Caracas, a city IMF staff last visited more than a decade ago.

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WNU Editor: I have trouble seeing how the IMF and the World Bank can work together to stop oil-led defaults. The oil price collapse has meant hundreds of billions in lost revenues for oil producing nations .... and while countries like Saudi Arabia, Russia, etc. will survive, I have trouble seeing how countries like Venezuela .... with problems are far more deeper than just a collapse in the oil price, will be able to survive even if they do get a bailout.

World Bank: High Risk Of Another Israeli-Palestinian Conflict

Palestinians look at the damage at the Hamas training camp after it was hit by an Israeli airstrike in the northern Gaza Strip. Photograph: Mohammed Salem/Reuters

AFP: World Bank warns of 'high risk' of Israel-Palestinian conflict

Jerusalem (AFP) - The World Bank warned of the "high risk" of renewed Israel-Palestinian conflict if the political and economic status quo between the two sides persists, in a report released Tuesday.

"The persistence of this situation could potentially lead to political and social unrest," it said.

"In short, the status quo is not sustainable and downside risks of further conflict and social unrest are high," said the World Bank.

The percentage of the population living under the poverty line has reached 39 percent in Gaza and 16 percent in the West Bank.

WNU Editor: In a region where war has become the norm .... it is not much of a stretch to see another Israeli - Palestinian conflict. But unlike past conflicts .... the Palestinian leadership is in disarray .... Abbas out of options, out of synch with angry Palestinians (AP), and Hamas has its own problems .... A weakened Abbas cannot save Hamas (Al-Monitor).

World Bank Warns Of Human "Calamity"

From CBS News:

Global Economic Crisis Speeding Up Poor Nations' Demise; Bank Urges More Money From Donors.

(AP) The global financial crisis could become "a human and development calamity" for many poor countries, the World Bank said, urging donor nations to speed delivery of money they have pledged and consider giving more.

Developing countries, its main constituency, face "especially serious consequences with the crisis driving more than 50 million people into extreme poverty, particularly women and children," the bank said Sunday.

Bank President Robert Zoellick said some of the poorest economies are being hit by "second and third waves of the crisis." He said no one knows how long it will last or when recovery will begin.

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My Comment: They do not have a plan ... but they want more money.