Thursday 21st July 2022 -- At a recent campaign rally, St Kitts and Nevis Prime Minister Timothy Harris spoke about there being “storm clouds on the horizon” – and now the sky is growing darker.
Earlier this week, IBM’s stock price fell 6% as it reported its cash flow forecast was below previous estimates. This has reaffirmed fears amongst policy makers and economic experts that the shrinking US economy could trigger a global recession.
Warning lights have been flashing for some time with US bond markets signalling a recession could be close. US inflation has reached a 40 year high, with Forbes reporting that this has led to many housebuilders pausing construction, pushing the US housing market into ‘meltdown’.
This turmoil in the US economy will raise concerns that the impact will soon hit St Kitts and Nevis. Less money in people’s pockets means fewer vacations, with fewer tourists spending their money here.
Some regional leaders have already highlighted the threat facing the Caribbean. Only last month, Jamaican Prime Minister Andrew Holness stated that a recession driven by rising oil prices would impact the number of tourists visiting the region with “devastating consequences for the Caribbean.”
These rises, in large part caused by Western sanctions on Russia for their invasion of Ukraine, are just one impact of the war. Soaring food prices have been exacerbated by the disruption to Ukraine’s economy, with the country being one of the world’s biggest grain producers.
Across the federation, the cost of filling up the car or doing the food shop is proving increasingly expensive and putting pressure on household budgets.
Experts fear that until there’s a fundamental change in the global economy, these rising prices could continue for a little while longer yet.
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