Global Economy and Currency Performance Amid Weakening US Dollar: Impact of Russia-Ukraine War and US Bank Bankruptcy

► Global Economy and Currency Performance amid Weakening US Dollar
The global economy is undergoing a broad-based, more severe than projected recession. The prognosis is negatively impacted by the rising cost of living, the general tightening of financial conditions, US bank closures, Russia's invasion in Ukraine, and the ongoing COVID-19 outbreak. Investment growth in emerging market and developing economies is predicted to remain below its average rate of the past two decades. Any additional adverse shocks could push the global economy into recession. Small states are especially vulnerable to such shocks because of their reliance on external trade and financing, limited diversification, elevated debt, and susceptibility to natural disasters.

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Impact of Russia-Ukraine War
The global economy has been deeply affected by the Ukraine-Russia war. It has become a hindrance to the growth of all the sectors operating in the economy, shaking the financial markets. The COVID pandemic had already disrupted the global transportation system, and now with the invasion of Russia on Ukraine, the transport system is likely to be more affected. Sea Freight and road freight are the most impacted out of all other modes. In the global business scenario, both plays a major role contributing to the trade of goods.

■ Almost all the European countries majorly depend on the Russian Energy, mainly gas. The surge in oil prices due to the disrupted supply chain are causing the global economy to shrink. Traders are finding certain alternatives in an already tight market. Russia and Ukraine produce 12% of world's oil and 17% of its natural gas.
■ The Ukraine- Russia war has impacted the supply chain. Due to the disturbance in the transport system and the ports there has been delayed supplies and bottleneck supplies to be delivered. This has led to decrease in supply as compared to the global demand, leading to increased prices.

► Impact of US Bank Bankruptcy
■ The bankruptcy of Silicon Valley Bank, the 16th largest bank in the US, and the decline of Signature Bank, which was followed by a sharp decline in the price of Credit Suisse's stock, have raised questions about the safety of depositors' savings around the world.
■ The current financial crisis has completely wiped out SVB's equity and damaged investors' confidence, while the value of the bank's stockholders has been lost. It was because of that rush on deposits that the third-largest bank failure in American history happened. Signature was being taken over to protect the depositors' funds as well as the stability of the American financial system.

► Key Findings
■ North America Economic Performance: According to the IMF, the nominal size of the 24 economies that make up North America's GDP was around USD 26.8 trillion in 2021, an increase of USD 2.7 trillion from the previous year. North American inflation increased by 3.2% from 2021 to 2022, reaching to 7.9%. The soaring dollar will decline in value in 2023, as the US economy is expected to enter into a recession and the Fed lowers interest rates.
■ Declining Currency: The euro experienced tremendous turbulence in 2022. It was dubbed "the worst year in the history of the euro" according to reports. At the beginning of the year 2022, the EUR/USD exchange rate was USD 1.137, but in July, it breached parity for the first time in 20 years, setting a 20-year low. August 2022 saw the euro trade at a two-decade low of 0.9903 against the dollar.
■ Increasing Consumption: The effects of this Eastern expansion on multinational corporations globally are extensive. The populous growing economies of China and India in Asia will be the main forces behind the fast rise in global consumption. Consumer markets in populous Southeast Asian countries will also expand quickly, especially in Indonesia, the Philippines, and Vietnam.
■ High Oil Export: In 2022, the UAE's external sector mirrored the country's strong domestic economic growth, with non-oil foreign trade reaching previously unheard-of highs during the first half of the year and registering high single-digit to double-digit growth across all areas of trade, including exports, imports, and re-exports. More specifically, according to government officials, the UAE's non-oil foreign trade volume surpassed the AED 1 trillion level (USD 288 million) throughout the first half of 2022, representing a 17% increase over the same period in 2021

Makreo Research has published a study titled "Global Economy Performance". This study covers performance of global economy and currency performance on regional level and it is the right blend of qualitative and quantitative factors. We have complied scattered information in a systematic format that has given a meaning to the market past performance.

► The report examines the Global Economy Performance on below parameters:

■ Market Assessment:
The report examines global economy performance including Global GDP, Inflation, Impact of US Bankruptcy, Impact of Russia Ukraine War and Currency performance. US Dollar currency performance with other currencies has been discussed in the report. Currency Performance by geography has been described mainly in three ways including regional distribution, distribution by major economies, and by emerging economies.

■ Economy Assessment:
EPTD analysis has been done to highlight the important economic factors having an influence over the industry. Macro economy assessment has also been carried out.

■ Region Assessed:
North America, Europe, Asia-Pacific, Middle East

For more information on the research report, refer to below link:
https://www.makreo.com/report/global-economic-currency-outlook-amid-weakening-us-dollar-usd

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This release was published on openPR.