International
21:19 24 January 2022
Post by: WBJ

The world economy is plunging into crisis: IMF

The world economy is plunging into crisis: IMF
Source: Photo by Isi Parente on Unsplash

The global economy enters 2022 in a weaker position than previously expected. As the new Omicron COVID-19 variant spreads, countries have reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging markets and developing economies. The ongoing retrenchment of China’s real estate sector and slower-than-expected recovery of private consumption also have limited growth prospects.

According to IMF, the global growth is expected to moderate from 5.9 in 2021 to 4.4 percent in 2022 – half a percentage point lower for 2022 than in the October World Economic Outlook (WEO), largely reflecting forecast markdowns in the two largest economies. A revised assumption removing the Build Back Better fiscal policy package from the baseline, earlier withdrawal of monetary accommodation, and continued supply shortages produced a downward 1.2 percentage-points revision for the United States.

Elevated inflation is expected to persist for longer than envisioned in the October WEO, with ongoing supply chain disruptions and high energy prices continuing in 2022. Assuming inflation expectations stay well-anchored, inflation should gradually decrease as supply-demand imbalances wane in 2022 and monetary policy in major economies responds.

Risks to the global baseline are tilted to the downside. The emergence of new COVID-19 variants could prolong the pandemic and induce renewed economic disruptions. Moreover, supply chain disruptions, energy price volatility, and localized wage pressures mean uncertainty around inflation and policy paths is high. 

(WBJ)


imf
inflation
gdp
world
pandemic

More News

lifestyle

LifeStyle
2 months ago

'We work hard, we achieved what we have on our own, we are strong women, and we have our voice': Joanna Krupa

LifeStyle
2 months ago

Magdalena Lamparska: 'Viewers have come to enjoy watching movies at home'

LifeStyle
2 months ago

8th edition of the 4 Design Days in Katowice 25–28 January Everlasting design. Timeless architecture.

LifeStyle
2 months ago

Children's birth completely changed my perception of the world: actress Zuzanna Grabowska

Book of Lists

Book of Lists
3 years ago

The largest Polish companies under the Book of Lists microscope! Book of Lists 2020/2021 certificates have been awarded.

Book of Lists
3 years ago

25th jubilee edition of Book of Lists – project start