Home Business Expert cautions that the West cannot shake off the “ghost” weighing on...

Expert cautions that the West cannot shake off the “ghost” weighing on its economy.

Inflation is at the center of the world’s attention in 2023, and the latest data showed that the West has failed to curb it, suggesting that central banks will continue to raise interest rates, which portends an economic downturn.

The latest data released by Europe point to lower inflation, as the euro zone index fell to 8.5% in February from 8.6% recorded in the previous month.

While the February 2023 result came in below analysts’ expectations of 8.2%, the main problem facing the eurozone is core inflation, which surged to historic levels last month.

The data says that the core inflation rate, which excludes food and energy price volatility (an important indicator closely monitored by the ECB), rose to 5.6% in February 2023 from 5.3% in January 2023.

And the growth of the core inflation index increases pressure on the European Central Bank to continue raising interest rates, which economist Alexander Nazarov expects.

The expert warns that higher interest rates will eventually lead to a sharp drop in stock markets and an economic downturn. As evidence, Nazarov cited inflation data from leading European economies, noting that the consumer price index (CPI) in France rose by 7.5% year-on-year in February last year, while in Spain inflation accelerated in the same month to 6.1 %. from 5.9%, which was previously reported, was recorded in January 2023 amid expectations of a slowdown in the index to 5.5%.

The expert predicted that the central banks of Europe and America will continue to raise interest rates in a failed attempt to contain inflation, which will eventually lead to a sharp drop in stock markets and an economic downturn.

The chart published by Statista also showed that inflation in the European Union, which includes 27 countries, reached 10% in January last year, with 12 countries of the union recording values ​​above 10%. This indicates that the efforts of the ECB have not yielded results.

And the situation in the US is no better than in Europe, as the consumer price index rose by 6.4% in January 2023 against expectations of 6.2%, according to a survey conducted by the DailyFX portal.

It also indicates that the US Federal Reserve will continue to raise interest rates amid fears that this will lead to an economic downturn.

Blame the high price!

Prices in Western countries began to rise as a result of the irresponsible policies pursued by Western central banks in recent years, when they pumped tens of trillions of non-subsidized funds into the economy.

Similarly, the imposition of sanctions against Moscow and their consequences have driven up energy prices, stoking inflation amid assurances from experts that “the sanctions have begun to sting those who imposed them.”

For its part, the International Monetary Fund expects global average inflation to reach 6.6% this year, and the fund also puts forward more pessimistic expectations for European economies, as it expects the EU inflation rate to reach 6.8% in 2023. . %, while the figure in the UK is likely to be at the level of 9.%, and in Germany at the level of 7.2%.

Source: RT

NO COMMENTS

Leave a ReplyCancel reply

Exit mobile version