Inflation should reach 5.3% this year in the euro zone, in particular due to the repercussions of the war in Ukraine, forecasts the institution, which is also alarmed by the high level of public debt in emerging countries.
Rising inflation and falling global growth. The International Monetary Fund (IMF) on Tuesday April 19 lowered its global growth forecast to 3.6% for 2022, down 0.8 points from those of January. A revision justified by the war in Ukraine, the sanctions against Russia and the confinements implemented in China to stem the Covid-19 epidemic.
The Washington-based institution also expects inflation to be higher and longer than expected. The war in Ukraine will disrupt supply chains, which have barely recovered from the disorganization of the past two years linked to factory closures, rising sea freight prices and port congestion. These new disturbances will mainly affect the wheat trade (of which Ukraine and Russia provide 30% of the world supply) as corn, and increase the price of raw materials. “The extent of these changes depends not only on the decline in exports due to the conflict and sanctions, but also on the elasticity of global supply and demand”, analyzes the IMF, which considers that the reserves of ‘other countries can be more easily used for oil than for gas.
he European countries are among the most affected by the economic shock of the war in Ukraine, due to their proximity: consumer prices are expected to increase by 12.6% in 2022 (and 5.3% in the euro zone), at levels comparable to those observed in South America or the Middle East, and the increase in GDP there has been revised sharply downwards, to 2.8%, down 1.1 points compared to the January forecasts.
