In 2021 and 2022, the price of daily necessities such as food, shelter, transportation, and energy increased at a rate that the world has not seen in the last few decades. As a result, a large part of the world’s population is struggling to afford the basic necessities of life. However, economists do not see any possibility of a transition from this situation in 2023, which is knocking on the door. Rather, they fear that the situation will worsen next year.

However, the world’s second-largest lender, the IMF, said that unless a major global disaster occurs, global inflation will drop to 4.7 percent by the end of 2023, which is about half of what it is now. But the answer to the question of how we got into today’s calamity lies in two words: the Corona pandemic and the (Russia-Ukraine) war.

For the past few decades, the world has lived between happy and sad days between controlled inflation and low bank interest rates. The first blow to this status quo came in 2020; After the corona pandemic started. To control the spread of this deadly disease of the respiratory system, the governments of different countries around the world issued various restrictions including suspension of daily economic activities and lockdowns.

The government has given financial assistance to the people who have become unemployed due to the lockdown and corona restrictions in developed countries in meeting food and housing expenses. Because of this, the central banks of different countries have provided millions of dollars around the world until the first half of 2020 and 2021.

Due to this support, the general population of developed countries did not experience the horrors of the pandemic in 2020; But the situation began to change in 2021 — when economic activity resumed around the world after breaking the pandemic’s moratorium.

After more than a year of stagnation in economic activity, the global economy could not recover quickly despite the full recovery of the economy in 2021. The Manpower crisis in the retail economic activities-transportation-health care sector, the increase in demand for energy in factories along with an increase in the price of energy products are the main reasons for not being able to return to this rhythm.

But even then, the global economy could have largely returned to pre-pandemic conditions by late 2021 or early 2022; But that was not possible because of only one reason – the Russia-Ukraine war.

Currently, the increase in the price of energy products around the world is largely responsible for the special military operation launched by the Russian forces in Ukraine on February 24 this year and the European and US sanctions on Russian oil and gas.

At the root of the crisis is the increase in fuel prices

During the corona epidemic, citizens of developed countries were able to spend those days almost safely depending on government incentives and their own personal savings. People in poor countries did not have those facilities, so they had to suffer a lot during the pandemic.

In 2022, that suffering has increased. Between 2021 and 2022, Sri Lanka, Haiti, Sudan, Lebanon, and some other countries have gone bankrupt.

But due to the increase in the price of energy, now the developed countries are also feeling the effects of the crisis. Because, only for this reason, the prices of all the daily essential goods and services including food, housing, and transportation are increasing across the Northern Hemisphere, as a result, the cost of living has increased several times.

Service sector workers in developed countries are going on frequent strikes to demand higher wages due to the rising cost of living, leading to the possibility of social unrest in many countries.

The governments of the United States and European countries are under a lot of pressure. Because on the one hand, they have to focus on limiting the cost of living of the people, on the other hand, they have to provide billions of dollars of financial and military support to Ukraine in the Russia-Ukraine war.

Meanwhile, the World Food Program (WFP), the UN’s global food security agency, said in a recent statement that in 2022, another 70 million people will join the ranks of food-insecure people around the world. According to the WFP report, a ‘tsunami of hunger’ swept the world in 2022.

Salvation will be found in 2023.

Central banks in the United States and Europe have raised interest rates against debt to control inflation. As a result of taking this step, the IMF predicts that global inflation will be reduced to 4.7 percent by the end of 2023, i.e. half of the current level.

However, the top executive of the US central bank, the Federal Reserve System, Jerome Powell, and the top executive of the European Union’s central bank, Christine Lagarde, told Reuters that they have raised interest rates against bank loans to rein in existing inflation.