Fears of an imminent recession in the US and Europe, brought on by months of rising inflationary pressure which dented consumer and business confidence, gathered steam during the quarter. Business surveys for the month of June pointed to a sharp deceleration in the health of the global economy, as manufacturing and service sector activity slowed among the world's leading economies.
Economic damage from the war in Ukraine has been a significant factor in the slowdown in global growth in 2022 and has greatly exacerbated the global inflation problem. Fuel and food prices have increased rapidly, hitting vulnerable populations in low-income countries hardest. The worsening inflationary picture necessitated a more aggressive pace of interest rate hikes from many of the world's central banks.