During this time, the news of frequent interest rate hikes, including the United States, the European Union, and the United Kingdom, was endless. The research report released by the World Bank on Thursday states that central banks around the world are shrinking currency and financial support, and their synchronization has never seen before half a century. It is expected that the central banks of various countries will increase the interest rate of global monetary policy to nearly 4%next year, which is twice the average of 2021.
The EU E -commerce Editorial Department collected and sorted out the latest policy interest rate data of the world’s major economies for reference. (names not listed in order)
The interest rate of the euro zone is currently 1.25%. A week ago, the European Central Bank made historic interest rate hike decisions. Considering that the inflation rate that is still high at present, the news that the central bank will continue to raise interest rates within the central bank.
US policy interest rates are currently 2.5%. After many “fierce” interest rate hikes, the inflation rate in the United States has temporarily slowed down, and it is currently 8.3%. Because the US dollar is a international settlement currency, the United States seems to be “fearless” in terms of interest rate hike decisions. The “US dollar interest rate hike”, the more the Fed, the more useful. It just suffered “traditional allies” such as the European Union and the United Kingdom. The decline in the exchange rate of the euro and the British pounds caused a large amount of funds to the US dollar market.
British policy interest rates are currently 1.75%, the highest in 14 years. In August, the Bank of England announced the maximum rate of interest rates since 1995, and finally allowed the inflation rate of the upper two digits to temporarily return to 9.9%.
Japanese policy interest rates are currently -0.1%. Not only did they not raise interest rates, they even relaxed monetary policies. They can be described as a maverick in the “little brothers” in the United States, and the yen’s exchange rate against the US dollar is also down. Of course, there is a certain reason for Japan to do this. First, its domestic inflation rate is only 2.6%, which is still in a safe range. Second, Japan, as a barren island country, mainly relies on exports. Help to promote the export of Japanese products.
Because monetary policy is different from European and American countries, it is impossible to give a policy interest rate in accordance with European and American standards. However, the central bank has recently announced interest rate cuts to boost domestic demand and foreign trade market. The scenery in China is unique. At present, the domestic inflation rate is only 2.5%, and the interest rate reduction space is still very large.
The World Bank estimates that due to this wave of radical policies, the global economy may lead to decline next year. Global GDP will slow to 0.5%in 2023, and shrinks by 0.4%at a per capita calculation, which has met the technical definition of economic recession.
What is even more worrying is that the World Bank estimates that this wave of radical interest rate hikes is not enough to cope with the inflation crisis at the moment. According to the model, if the central banks of various countries want to control inflation in the target range, the global interest rate may be as high as height 6%, this will further exacerbate the risk of recession.
The World Bank suggested that countries should strive to control inflation without causing global recession. And what to do is still an unknown.
Post time: Sep-19-2022