There are growing signals of a new global strain on the world economy. Rising energy costs across Europe and China in 2021, combined with intensified sanctions on Russia in 2022 and 2023, are cited as the principal drivers. These observations come from an independent expert in industry and energy, Leonid Khazanov, as reported by Lenta.ru.
Khazanov notes that the worry over a potential lost decade in the global economy is warranted. He explains that the spike in energy prices in 2021 sparked economic difficulties, starting with an energy crunch in Europe and China. This then evolved into a sanctions-related crisis involving Russia, and now concerns about a banking downturn have entered the picture.
In the current environment, following the collapse of major investment lender Silicon Valley Bank in the United States and issues at Swiss lender Credit Suisse, an impact on household real incomes and a wave of Western banking failures cannot be dismissed. Yet the list of possible risks facing the global economy is broader, and further developments could unfold in unexpected ways, according to Khazanov.
On March 28, remarks from Indermit Gill, Chief Economist at the World Bank, warned that a prolonged “lost decade” in global growth could emerge. Such a period would complicate efforts to tackle persistent poverty, widening income inequality, and the climate challenge facing large economies worldwide, as outlined in Gill’s assessment.