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CMG: The constant increase in interest rates in the US increases the risk of a global recession

The constant increase in American interest rates could lead to an accelerated global recession, according to the results of a survey conducted by the “Global Business” program of CGTN, at the China Media Group (CMG), in cooperation with China’s Zhenmin University.

As stated, general concern in the world was caused by the decision of the US Federal Reserve (FED) to increase the benchmark interest rate by an additional 0.75 percentage points, for the fourth time in a row.

The survey was conducted among 100 economists around the world, 90 respondents believe that the American move increases the risk of stagflation, while 94 percent of respondents believe that the American move could lead to a strong increase in debt risk in developing countries.

The FED attributed the reason for the increase in interest rates in the last year to inflation in the country, stating that inflation is temporary.

However, only 15 percent of respondents agree with the FED’s statement.

The survey showed that 57 percent of participants think that the main cause of inflation is the American loose monetary policy and frequent printing of dollars, while about half of the respondents believe that the American initiation of trade disputes with China is one of the important causes of inflation in the country.

As many as 72 percent of economists believe that the high rate of inflation will represent the main problem that the American economy will face in the next one to two years.

Under the influence of the US constant interest rate increases, as well as for reasons of preventing inflation and stabilizing domestic currencies, the central banks of many countries increased interest rates in their countries.

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As stated, 72 percent of surveyed economists claim that American moves threaten employment in many countries, up to 83 percent of them estimate that it will undermine social stability in developing countries.

The Fed’s moves also added to market concerns about the outlook for the global economy.

Thus, 73 percent of the respondents believe that the FED’s moves burden global economic flows, while 88 percent of them forecast that this will lead to instability in the global financial market, and another 82 percent of the respondents believe that the American moves will represent blows to the confidence of the market and investors.

The World Bank has previously warned that waves of interest rate increases across the planet will push the world economy into recession.

The survey also showed that 54 percent of the respondents believe that the FED aims to transfer the risks of domestic inflation to foreign countries.

In that survey, 67 percent of economists appealed to the US to think more about the possibilities of risk spillover when making decisions, so as not to further complicate the global economy, which is already in recession, CMG announced.

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