Hadžić: Everything indicates we are heading towards stagflation, countries like the US will have to cause an artificial recession

(Patria) - Faruk Hadžić, an economic analyst, commented on social networks about the slowdown in economic activity worldwide and the increasing rise in prices and inflation that citizens are facing.

“In October last year, in an op-ed, I announced the possibility of stagflation (stagnation + inflation). The first official data on GDP movements in the first quarter in the USA, France, and Spain indicate that we are heading towards it, although it is still too early to say with complete certainty that stagflation has arrived. However, the slowdown and decline in economic activity, coupled with rising prices, indicate that we are heading in that direction.

The American economy recorded a decline of -1.4% in the first quarter, well below analysts' expectations (who predicted a growth of 1%).

This news is not good at all, because it is now expected that countries like the US will have to cause an artificial recession, which will not be mild, in order to curb inflation by raising interest rates. It is certain that this will also have consequences for our country, especially knowing that Germany, our most important foreign trade partner, announced today that they had a growth of 0.2% in the first quarter,” Hadžić states.