A global economic outlook is dwindling. Inflation-fighting efforts were in vain by the central bank due to the war between Russia and Ukraine. China is prioritizing political control over economic growth, and we can expect that there will end up being a global recession in the near future. In the article by Forbes the author expresses that there is a lot of evidence pointing towards world economy that will be slowing. We can see that the Fed Reserve has raised their interest rates due to tightening monetary policy and it shows tightening among most of the banks that they track. In places specifically like Europe, and China we can see that the European Union is planning to cap prices paid to Russia which in turn has made electricity prices soar, and energy intensive industries having to shut down. While in China their economy is weakening due to President Xi Jinping focusing on political power than the economy overall. We cans ee that companies that are trading with Europe should be worried due to services with energy intensive businesses, and any businesses selling to China should be expecting lower growth due to decline in materials overall. It might be difficult to do business with either of these places due to the overall state of the economy.
The Chapter that I feel like makes the best connection to this article would be Chapter Three: “How to Anticipate Recessions and Downturns” This chapter teaches how we as managers need to understand how to manage recessions / downturns when they arise so we can keep our businesses running. One major connection from the chapter to the article that I noticed would be the foreign business cycles. The foreign business cycle could really affect the trade between other countries and China due to President Xi Jinping focusing on political power over its economy which makes trading with China harder due to them expecting lower growth based off of them not having an abundant amount of materials overall. This ties into the foreign business cycle due to it stating that a recession can greatly negatively affect the economy due to countries that heavily rely on trading with certain bordering countries. One other connection that I pinpointed would be in regard to monetary policy. In the article the author explained that the federal reserve was raising their interest rates. This directly ties into Chapter Three’s section about monetary policy in which it states that the Fed can slow the economy by tightening their monetary policy which will decrease money supply or it will raise interest rates overall.