IMF is predicting the shrinkage of top world economies including the United States, China, and the European Union. Consumer prices inflation rate in the world’s largest economy United States is estimated to increase significantly to reach 8% in 2022, up from 4.7% in 2021. The growing inflation rate is anticipated to slow down global demand to a great extent.
The diminishing global demand is further propelled by the increasing number of Covid cases in China. The government has implemented strict lockdown policies to combat growing covid cases. Global manufacturing facilities are experiencing supply bottlenecks caused by Chinese manufacturers, further clogging the supply chain, and slowing the global economy.
In November, Asia's factories struggled with rising costs, weakening regional currencies, and declining global demand, propelled by ongoing lockdown in China. Manufacturers in export-reliant economies are expected to face additional pressure in the coming months. To cut down the growing costs, manufacturers are reducing production levels and laying off workers. Manufacturers are bracing for even worse days ahead as European and American customers cut back on their spending.
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