Engineer works at a gas treatment plant in Vadu, Romania. (Photo: AFP/VNA) Hanoi (VNA) – The global energy and food crisis, central banks’ interest rates hiketo cope with inflation and the establishment of the COP27 “loss and damage”fund, were among the top 10 world economic events in 2022, as selected by theVietnam News Agency (VNA).
1. World faces energy and food crisis
TheRussia-Ukraine conflict that broke out in late February 2022 has pushed upglobal food and energy prices. Gas prices rose nearly five times on March 7compared to before the conflict. The Food and Agriculture Organisation (FAO)Food Price Index in March hit a new high of 159.3 points. The retaliatorysanctions between the US, Europe and Russia have caused oil and gas supplies todrop and their prices to rise sharply. Geopolitical tensions and naturaldisasters have disrupted global supply chains, exacerbated inflation, andresulted in growth slowdown.
2. Central banks hike interest rates tocope with inflation
The US FederalReserve (Fed) on March 16 approved a 0.25 percentage point rate hike, the firstincrease since 2018. In 2022, the Fed raised interest rates seven times to arange of 4.25-4.5%, the highest since 2007. On July 21, the European CentralBank (ECB) also raised interest rates for the first time in 11 years, and thenincreased rates three more times that year. To easedecades-high inflation, central banks have hiked interest rates after keepingthem close to 0% to support economic growth during the pandemic.
3. Euro falls below US dollar
The euro fell toa two-decade low of 0.9880 against the US dollar due to Europe facing an energycrisis and the risk of a serious economic recession amid the Russia-Ukraineconflict. The interest rate gaps and government bond yields in the US andEurope have prompted investors to shift from the euro to the US dollar.
4. COP27 agrees “loss and damage” fund totackle climate impacts
The 27thConference of the Parties to the United Nations Framework Convention on ClimateChange (COP27), which took place in Egypt from November 6-20, approved anagreement on climate change, notably an initiative on the establishment of a“loss and damage” fund, providing financial assistance for developing nationsstricken by climate change.
5. China’s 20th CommunistParty Congress adopts important economic decisions, policies
The 20th Congressof the Communist Party of China in October 2020 was an important event forChina as the world’s second largest economy has embarked on building a modernsocialist country. One of China's most important tasks in the next five yearsis to invest heavily in technology to modernise its economy and improve growthquality.
6. OPEC makes largest production cut since2020
Members of theOrganisation of the Petroleum Exporting Countries (OPEC) and OPEC Plus agreedin Vienna, Austria, on October 5 to slash oil production by 2 million barrelsper day, equal to 2% of global supply from November 2022. This was the biggestcut by OPEC Plus since April 2020 in a bid to shore up prices. The decision hasraised concern over oil supply, exacerbated inflation, and held back globalgrowth.
7. Global gold price sets new record
The world goldprice touched a record of 2,078.8 USD/ounce on March 8. Inflationary pressuresand geopolitical uncertainties have boosted investment demand in gold, which isconsidered a safe haven. However, this upward trend did not last long as thestrong US dollar and the tendency to raise interest rates by major centralbanks have made gold lose its shine.
8. Cryptocurrencies face uncertain future
One of theworld's biggest cryptocurrency exchanges, FTX, on November 11 filed forbankruptcy protection in the US. Bitcoin on November 22 fell to 15,480 USD, itslowest level over the past two years. Digital-asset lender BlockFi on November28 also filed for bankruptcy protection in the US, citing FTX's collapse andvolatility in the crypto markets.
9. Global stock markets fall sharply
The MSCI AllCountry World Index (MSCI ACWI), an international equity index, on June 6dropped 21% from the record level set in November 21 to 597.64 points. Sincethen, the world stock markets have fallen into a long-term downtrend amid highinflation. The wave of sell-offs have been seen in stock markets globally asinvestors worried that the Fed would move faster on interest rates. TheInternational Monetary Fund warned that the market would goes into“hibernation” if the economic downturn worsens.
10. Billionaire Elon Musk buys Twitter
Billionaire ElonMusk completed his 44 billion USD takeover of Twitter Inc on October 27. After thepurchase, he laid off 50% of staff and raised fees for users. His newmanagement policy has forced many partners to stop or suspend advertising onTwitter. According to the Bloomberg Billionaires Index, a daily ranking of theworld's richest people, Musk’s dropped to 169.8 billion USD as of November 22,losing 100.5 billion USD from earlier this year, which was an unprecedenteddecline in wealth in Bloomberg's billionaire rankings./.
