We could be staring at global depression unless world leaders negotiate, warns expert

09 May 2022 07:10pm

Datuk Prof Dr Rajah Rasiah says there is the need for more negotiations to address the issue of inflation in many countries.

SHAH ALAM - An economic expert has warned some countries may face hyperinflation or out-of-control inflation where price of goods and services rise at an annual rate of 1,000 percent or more, urging for more discussions and negotiations needed over the matter.

Universiti Malaya Asia-Europe Institute Economic Professor Datuk Prof Dr Rajah Rasiah said this could lead to economic depression unless world leaders address the issues.

“What we are facing now, in some countries, is that inflation is already here.

“The stagnation would lead to rising unemployment and hyperinflation,” he said during Wacana English Edition on May 9.

The live show entitled ‘Europe Day Dialogue: Global Challenges in a Multipolar World’ was held in conjunction with Europe Day at Kumpulan Karangkraf headquarters in Shah Alam.

A total of 16 ambassadors and representations from the European Union states were present.

Also in attendance were Karangkraf Group Chairman Datuk Hussamuddin Yaacub, Karangkraf Group Executive Director Akmal Eirfan Mohamed Fauzi, Sinar Karangkraf Chief Executive Officer Farah Hussamuddin and Sinar Karangkraf Editor-in-Chief Rozaid Rahman.

Countries worldwide have been suffering due to two-year Covid lockdowns, the Ukraine war and the rise in commodity prices.

Rajah said even though there are some ongoing negotiations among leaders but more needs to be done to combat inflation.

"In many countries, this is imminent and unless we address this, then we are going to fall into depression.

"Morally I don’t think this is right because the suffering will involve everyone worldwide," he said.

It has been reported that annual inflation in the Eurozone has surged to 7.5%, up from 5.9% in February and higher than most analysts had predicted.

Companies across the continent are now battling impossibly high bills that threaten to disrupt production and shut down factories while households see their purchasing power plunge at record speed.

Malaysia's Consumer Price Index (CPI) in March 2022 rose by 2.2 per cent to 125.6 against 122.9 in March 2021, surpassing the average inflation for the January 2011-March 2022 period which stood at 1.9 per cent, said the Statistics Department today.

Prices of fertilisers have risen from RM100 to RM200 for every tonne of vegetable produced, causing local farmers to ask the government for subsidies to avoid the further rise in vegetables.