US Economy faces unanticipated decline due to Russia Ukraine Conflict -

Washington: The rising inflation and declining government expenditure in the wake of the Russia-Ukraine conflict have led to an unexpected slowdown in the US economy. In the first quarter of 2022, US GDP fell by 1.4 per cent. Also, the economy grew by 6.9 per cent in the last quarter of 2021. Against this backdrop, the downturn in the economy has become even more shocking. Analysts are predicting a slowdown in the economy for the Biden administration, which has taken a hit of rising inflation in the United States.

On Thursday, the US Department of Commerce released its first quarterly report for 2022. Inflation in the US has already reached record levels given the Russia-Ukraine conflict. Imports of foreign products to the United States have risen sharply, while demand for US products abroad has fallen sharply. As a result, the US trade deficit widened sharply. This has hit the economic growth rate hard.

On the other hand, the Russia-Ukraine conflict and the Coronavirus eruption in China have hit the US industry hard. The disruption of the global supply chain is having an impact on US companies. This includes companies in the agricultural and fuel industries. At the same time, the reduction in the corona coverage has led to a reduction in government spending. This factor is also said to have affected GDP. The downturn in the US economy is the first since 2020.

Moreover, analysts had predicted that the US economy would grow by one per cent. But the government’s figures have come as a shock to many. Analysts say that the downturn could signal the beginning of a slowdown in the US economy. Over the past two months, leading US experts, officials and analysts have warned of a recession.

The head of the Federal Reserve, Jerome Powell, has warned that the rise in interest rates could be a significant blow to the US economy. The Federal Reserve has since warned that rising home prices and interest rates on home loans in the United States may trigger a potential crisis in the housing sector. Analysts have also pointed out that increasing inflation in the US and the rising debt burden on the economy could also contribute to the economic slowdown.