By Stanley James, Business Editor
GLOBAL economic forecasts show that Zimbabwe’s prevailing economic situation is not in isolation as witnessed by events occurring in advanced and developing economies worldwide.
The latest World Bank global economic outlook report indicates that western economies are reeling from a combination of external and local shocks, climate change, COVID-19 pandemic, geopolitical tensions including Russia’s Special Military Operation in Ukraine.
Inflation rates for advanced economies have risen to record highest levels in more than two decades, a move that has affected socio-economic development while also fuelling poverty in most countries.
The trend has been necessitated by the increase in prices of basic food stuffs as the Special Military Operation in Ukraine has taken its toll on global supply chains and international trade patterns.
The United Kingdom, the United States, Germany and France among other advanced economies have therefore experienced a rise in terms of the cost of living since March this year on the back of persistent increase in annual and month on month inflation.
It is within that context that despite Russia being exposed to sanctions by the western currency and economies, its currency, the Rubble continues to strengthen against other currencies.
This is based on the comparative advantage of Russia as it accounts for over 40 percent of global requirements for gas, oil, fertilisers, wheat and minerals among other critical components.
Global economic trading data shows that in the United States gas prices have risen by over 30 percent, while in the UK energy prices have also soared by high levels.
Given the obtaining environment, the European Union’s biggest economy, Germany is also feeling the pinch of erratic gas supplies such that it has announced plans to revive coal supplies of thermal energy.
The World Bank has therefore slashed economic growth projections for the western or so called developed economies.