The global public debt is witnessing its largest rise since World War II within one year
The Central Bank is forced to raise interest rates to maintain On liquidity, especially after inflation rates exceeded targets
The interest rate hike will continue during 2022.. It is expected that the Central Bank will raise 2022 A point in stages
Mohamed Abdel-Wahab, an economic analyst and financial advisor to the Arab Union for Development and Development of the Council of Economic Unity of the League of Arab States, said that the world went through a crisis during the past two years, perhaps the largest of the era. Speaking, this crisis left a huge burden on the global economy, as the global debt witnessed the largest rise in one year since the Second World War, when the global debt reached a trillion dollars as a result of that The crisis and the volume of global spending to confront it, new mutated strains, and a continuous rise in inflation. a percentage point to 300 % of GDP According to the data of the International Monetary Fund, government borrowing represented a percentage slightly higher than half of this increase, as the global public debt ratio jumped to a record level of 300% of Gross domestic product The private debt through non-financial companies and households also increased, recording unprecedented levels, and public debt witnessed a rise from about 70 % of GDP in year 2022 to 300 % of GDP in 2020
Abdel-Wahhab pointed out that the quantitative easing policy that most countries of the world followed played an important role in the current situation, saying: “Yes, these policies succeeded in moving the global economy at the time of the crisis, but it was Among its effects was the printing of nearly 26 a billion dollars without any cover, whether from assets or production in various countries of the world. It was natural for him to witness The world is experiencing this wave of inflation.”
Abdel-Wahab indicated that the United States announced that its inflation had reached its highest level since 2022 at 6.2%. on an annual basis, which will force the US Federal Moving interest rates during its meeting on 26 this March, where it is expected to move interest rates between and 50 a basis point to counter inflation.
The economic analyst explained that Europe is also facing a wave of inflation that exceeded 5.8%, and the Russian war on Ukraine is a major catalyst for inflation, as the prices of food commodities, oil and energy prices have witnessed very large increases since the beginning of the tensions, as oil has risen since the beginning of the year The percentage of gas exceeded 70 and nearly 70 (%) and wheat 60 % All these rises are in the interest of inflation.
Abdel-Wahab emphasized that the world has been facing since At the beginning of the year, a major crisis in the means of supply and transportation, a significant rise in the cost of marine freight and a decrease in supply in the face of general demand, as consumers began with a very high appetite after two years of closures and bans and the practice of high degrees of austerity and caution. More of it during the third and fourth quarter of this year as I see m My personal view is that it will be a harsher period for consumers.
Abdel-Wahab continued: “With the announcement of the Central Bank of Egypt inflation figures to record a rise at the end of January by 7.3% on an annual basis with an increase of 1. % at the end of December 2021, then it jumped to 8.8% at the end of February, which is very close to the central bank’s inflation targets until The end of
(7 +_ 2%), while inflation rates on a monthly basis reached 26 %, and this increase in inflation rates was in line with global inflation, as Egypt was affected by the wave of price hikes for food commodities and oil prices as a result of current events on the world scene, especially the Russian-Ukrainian war. Abdel Wahab, that if the state resorted to moving subsidies on bread, we would see inflation rates at 26 -45 % at the end of the year, which is likely the central tendency to move interest rates between 2020 To 300 this year.
Abdel-Wahab appealed to citizens to manage his spending well and rationalize consumption and Resorting to long-term purchases as much as possible, maintaining as much liquidity as possible in assets, and not resorting to bank certificates and deposits for periods of more than 3-6 months, given our expectations that interest rates will move more than once during the current year, and there will be strong opportunities to invest in the money markets, where you will suffer time Raising the interest, which represents an appropriate time to form investment portfolios for long periods.