What We’re Watching: Global stagflation warning, food fight at the UN, China in Cambodia

Paige Fusco

World Bank issues stark stagflation warning

The war in Ukraine has frustrated attempts to revive the pandemic-battered global economy, creating an endless loop of bad news. That trend continued Tuesday when the World Bank slashed its global growth forecast to 2.9% – down from a January prediction of 4.1%. (It was 5.7% in 2021.) What’s more, the body warned that “subdued growth” will likely continue throughout the decade and could give rise to 1970s-style stagflation – the double whammy of a stagnant economy coupled with double-digit inflation. But the impacts of the lingering global economic crisis won’t be felt equally. The World Bank says that while wealthy countries like the US and China will experience slower-than-usual growth, developing countries will be hardest hit as borrowing costs rise. This is already playing out: Cash-strapped Sri Lanka was recently forced to default on its sovereign debt for the first time. Crucially, the World Bank also warned that the deepening food crisis could cause social upheaval in import-reliant countries in the near-term.

Ukraine update: Food fight at the UN

As the battle for Eastern Ukraine rages, with “stalemate not an option,” according to Ukrainian President Volodymyr Zelensky, tensions have also flared over the global food crisis worsened by the conflict. Millions of tons of Ukrainian and Russian grains and oilseeds remain shut in by the war, causing global shortages and price hikes that are hitting lower-income countries the hardest. At the UN on Tuesday, the European Council president said Russia is using food as a “stealth weapon” against the developing world, prompting Moscow’s ambassador to storm out of the hall. Moscow says Western sanctions are to blame for the food shortages. But while financial sanctions have made some importers wary of touching Russian cargo, there are no sanctions on Russian food or grain exports. Russia’s decision to selectively halt its own fertilizer exports has contributed to price hikes as well. Russian Foreign Minister Sergei Lavrov, meanwhile, is in Ankara, Turkey, where he will meet with his Turkish counterpart on Wednesday to discuss the grain exports from Ukraine that have been stalled by the fighting.

Is China building a base in Cambodia?

Western governments are warning that Beijing is set to cut the ribbon on a new naval base in Cambodia this week, despite years of denying it was building military facilities in the Southeast Asian country. If the Washington Post report is true, it would be just the second-known Chinese overseas military base, along with a facility in Djibouti. A Cambodian outpost would enable China to more easily keep an eye on shipping lanes that funnel into the Strait of Malacca, one of the world’s busiest trade passages. But it would also heighten concerns about Beijing’s claims on the South China Sea. China insists that vast swaths of the sea belong to it, despite internationally backed counterclaims by five neighboring countries. Cambodia, like most countries in Southeast Asia, is trying to balance the need for close relations with China against concerns about a popular backlash against Beijing, as well as an interest in preserving good ties with the US.

More from GZERO Media

Trump's silhouette as a wrecking ball banging into the Federal Reserve.
Gemini

President Trump has made no secret of his longstanding desire for lower interest rates to juice the economy and reduce the cost of servicing the $30 trillion federal debt.

The Nepalese government’s decision last week to ban several social platforms has touched off an ongoing wave of deadly unrest in the South Asian country of 30 million.

The Nepalese government’s decision last week to ban several social platforms has touched off an ongoing wave of deadly unrest in the South Asian country of 30 million.

General Wieslaw Kukula, chief of the General Staff of the Polish Armed Forces, takes part in an extraordinary government cabinet meeting at the Chancellery of the Prime Minister, following violations of Polish airspace during a Russian attack on Ukraine in Warsaw, Poland, on September 10, 2025.
(Photo by Aleksander Kalka/NurPhoto

NATO jets last night shot down Russian drones that had entered Polish airspace. Poland said the unmanned aircraft had crossed the border en route to a strike on Ukraine.

U.S. President Donald Trump shakes hands with European Commission President Ursula von der Leyen, after an announcement of a trade deal between the U.S. and EU, in Turnberry, Scotland, Britain, July 27, 2025.
REUTERS/Evelyn Hockstein/File Photo

100: In his ongoing, and so-far fruitless, efforts to convince Vladimir Putin to stop the war in Ukraine, Donald Trump reportedly asked the EU to apply 100% tariffs on India and China, the Kremlin’s most important trade partners.

Throughout his Walmart career, Greg has earned nine promotions, moving from an hourly associate to now overseeing 10 Walmart stores. His story is one of many. More than 75% of Walmart management started as hourly associates, and the retailer offers competitive benefits to support associates on and off the clock. At Walmart, there is a path for everyone. Learn how Walmart is investing in opportunities for associates at all levels.

This summer, Microsoft released the 2025 Responsible AI Transparency Report, demonstrating Microsoft’s sustained commitment to earning trust at a pace that matches AI innovation. The report outlines new developments in how we build and deploy AI systems responsibly, how we support our customers, and how we learn, evolve, and grow. It highlights our strengthened incident response processes, enhanced risk assessments and mitigations, and proactive regulatory alignment. It also covers new tools and practices we offer our customers to support their AI risk governance efforts, as well as how we work with stakeholders around the world to work towards governance approaches that build trust. You can read the report here.