Emerging economies, global inflation, and growth deceleration

The “World Economic Outlook” report released by the International Monetary Fund (IMF) on April 19th depicted a worsening in the global economic scenario for 2022: lower economic growth and higher inflation, compared to the January projections. As director-general Kristalina Georgieva had said in the previous week, the war in Ukraine represented a “substantial setback” for the global economic recovery.

Global inflation and growth deceleration

The IMF pinned the global slowdown on Russia’s invasion of Ukraine. It projected a sharp decline in 2022 economic growth worldwide as the war drives up energy prices and stumbles on pandemic economic recoveries. Now, the IMF forecasts global growth at 3.6% for the year, lower than its 4.4% forecast issued in January. Beyond 2023, it expects growth to slide down to about 3.3%, whereas growth in 2021 was about 6.1% (IMF, 2022). Figure 1 depicts the reviewed paths forecast by the IMF for potential GDP starting at October 2019.

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