Editorial Dept. Voz de la Diaspora
In a publication released today by the International Monetary Fund on its website, the economic entity assures that the economies of the whole world are suffering a great setback due to, mainly, for the Russian invasion of Ukraine.
Information compiled by Pierre-Olivier Gourinchas, Economic Counselor and Director of the IMF Research Department, shows that when the world economy had not yet recovered from the effects of the pandemic, inflation in many countries had been rising due to imbalances between supply and demand, which led to a tightening of monetary policy.
further, says recent lockdowns in China could cause bottlenecks in global supply chains. Likewise, the report warns that in addition to the immediate and tragic impact on people's lives, war will slow economic growth and spur inflation.
According to this report, projections for world growth will go down a 3,6%, so much for 2022 as for 2023.
The author also details that inflation has become: “a clear and imminent risk for many countries. Even before the war, it had already risen due to the escalation in the prices of raw materials and the imbalances between supply and demand.. many central banks, like the Federal Reserve, had already taken steps towards a tightening of monetary policy”, as can be read in the note published on the website of the international entity.
Similarly, indicates that inflation will remain high for much longer. In the United States and some European countries, it has reached unprecedented heights in more than 40 years, amid labor shortage.
“The uncertainty surrounding these projections is considerable., and far exceeds the usual range”, notes the report, as well as that: “growth could slow further and inflation could exceed our projections if, for example, sanctions extend to Russian exports”.
Before this panorama, The entity recommends that: “in this difficult context, national policies and multilateral initiatives will be important. Central banks will need to tighten their policies aggressively to ensure that medium- and long-term inflation expectations remain anchored.”.
The report has been prepared by Pierre-Olivier Gourinchas, who has extensive research experience, who have focused primarily on the fields of international macroeconomics and finance. His latest studies have focused on the scarcity of safe assets worldwide and currency wars; the international monetary system and the role of the US dollar; the dominant currency paradigm; the determinants of capital flows to and from developing countries; international portfolios; global financial crises, and the impact of the COVID-19 crisis on business bankruptcies.