The increase in interest rates in the United States of America is influencing the global increase in prices, at the time of the food crisis and the war in Ukraine, presenting the world with the “perfect storm”.
This is what the chief diplomat of the European Union, Josep Borrell, said, adding that this is pushing the world towards economic recession.
“Everyone is rushing to raise interest rates – this is pushing the world into recession,” predicted Borrell.
The rise in the value of the US dollar is making the prices of basic products in other countries nearly affordable, unless central banks follow the lead of the United States Federal Reserve.
The Eurozone is already struggling to raise interest rates to reduce inflation.
Although financial matters are not Borrell’s remit, he discussed the problem when he mentioned the severe food crisis affecting Africa and parts of the Middle East.
“I am afraid that we are only at the beginning, that the food crisis will only worsen in some parts of the world”, he said.
The world itself has become more “competitive”, he emphasized, mentioning the deepening rivalry between the United States and China.
“Everything is becoming a weapon: energy, investment, information, migration, data,” adds Borrell.
According to him, the world is being hit by “authoritarian tendencies”, especially in China and Russia.
Borrell has also said that the EU has acted wisely and decisively against Russia, after the start of the war in Ukraine, and that such an approach is needed in more diplomatic circles.
“React. Take more initiative. Get ready for courage,” he urged the ambassadors, mentioning more “taboo-breaking decisions” regarding the stances on the war in Ukraine.
The war in Ukraine started on February 24. Russian President Vladimir Putin calls the war a “special military operation” to demilitarize Ukraine.
The West has responded to Russia, hitting the economy of this country with harsh sanctions.
As a result of the war, thousands of people have died and millions more have been displaced from their homes.
