Inflation and the energy crisis: the two big challenges this year, according to the Davos Forum

Rising cost of living due to inflation and energy prices are the two biggest economic threats globally for 2023 and 2024. The annual report of the World Economic Forum says it, the appointment of major global political and financial leaders every year in the city of Davos.

The text, presented this Monday in conjunction with the start of a week of debates in the Swiss town, states that “the pressures on energy and food supply, which should last two years, and the sharp increase in the cost of living and the cost of debt due to rising interest rates”, are the two biggest threats.

Vladimir Putin’s war in Ukraine and its consequences in the form of an energy crisis, as well as the economic reopening after the confinements due to the pandemic, make there is a shortage of supplies and the prices of almost everything skyrocket.

The report, written by an organization at the pinnacle of global financial capitalism, highlights where the risks lie to the planet’s dominant economic system: Millions more people fall into extreme poverty and social tensions rise, something the report considers more serious even than armed conflicts.

Fear of social outbreaks

Davos isn’t so scared of war because someone always takes advantage of it. He is more afraid of a social outbreak to wipe out what is left of a neoliberal order which at least in Europe is in doubt for the policies implemented after the pandemic, other than the adjustments applied after the financial crisis that began in 2008.

The report, for which the World Economic Forum consults more than 1,000 experts, assures, according to the press release that accompanied its presentation, that “conflicts and geo-economic tensions have caused a series of deeply interconnected planetary risks”.

These risks are, he explains, “the pressure on the supply of energy and food which should last at least the next two years, and sharp increases in the cost of living (due to inflation) and in the cost of debt (due to increases in interest rates ).interest rates applied by the central banks of the great powers).

These risks, the text continues, are a brake “on efforts to combat other long-term threats, mainly against climate change”.

Insurance and consulting firms such as Marsh McLennan and Zurich Insurance also participate in the drafting of the report. He also says that “the global pandemic and war in Europe have brought to the fore crises in energy, inflation, food and security,” which can cause “societies polarized by disinformation and disinformation” and even “economic wars.” .

The challenge of climate change

Davos calls for global collaboration at least to address the climate crisis: “Unless the world starts collaborating effectively on (climate crisis) moderation and climate adaptation, the next ten years will bring more global warming and ecological collapse.”

And already, to curb geopolitical rivalries, the powers should also work together to avoid “creating social unrest at an unprecedented level, given that investments in health, education and economic development are reduced, further eroding social cohesion”.

Another of the aspects highlighted by the report and which appears to be one of the novelties this year is that of rearm which causes war in Ukraine and other military tensions, such as China’s permanent threat to Taiwan.

The immediate economic future is gray. The World Bank fears a global recession (Europe expects to narrowly miss out on the latest better-than-expected data and forecasts just a few months ago), but at least a third of the world economy will fall into recession this year, mainly due to the effects of war, inflation and the rising cost of money for households, businesses and governments.

Brussels, special

B. C