Review of Post-Covid-19 Crisis Global Economic Conditions

Abstract

This paper conducts a review of the current global economic conditions and economic policies pursued during and post the COVID-19 crisis. The review indicates that, as of 2022, the anticipated global economic recovery from the COVID-19 shocks is pessimistic. In 2022, the GDP growth rates for all world regions were revised downwards largely due to disruptions in global supply chains attributed to the ongoing Russia-Ukraine conflict. The review finds that the global economies are currently (as of 2022) experiencing a sharp global recession accompanied by a global inflation crisis. The review indicates that the global inflation crisis has been induced by the monetary-fiscal expansionary and quantitative easing (QE) policies pursued by governments during the COVID-19 crisis period. Therefore, to curb current global inflationary pressures, there is a global consensus that monetary authorities should hike interest rates. However, high-interest rates could induce a surge in debt distress in emerging and developing countries, and may not fix supply chain disruptions. We suggest that perhaps revisiting the growth models/supply-side policies pursued before the subprime crisis may help to deal with the current global stagflation problems.