Marwa Shaheen - Beth:
International Monetary Fund (IMF) First Deputy Managing Director Gita Gopinath said central bank governors must act decisively and quickly to tackle rising inflation.
Gopinath added, in an International Monetary Fund event, that there is confidence that central banks will reduce inflation, but the time frame for action is narrow.
And she continued, "What that means is to act now, and I think from everything I've heard, it seems that the intent is on that."
In its World Economic Prospects report, the International Monetary Fund said that the war in Ukraine has created a catastrophic humanitarian crisis that requires a peaceful solution. At the same time, the economic damage caused by the conflict will lead to a marked slowdown in global growth during 2022 and higher levels of inflation.
The Fund added that fuel and food prices have increased rapidly, with the greatest impact on vulnerable populations in low-income countries.
Global growth is expected to slow from about 6.1% in 2021 to 3.6% in 2022 and 2023. This represents a decline of 0.8 percentage points and 0.2 percentage points in 2022 and 2023 compared to the January forecast.
Beyond 2023, forecasts indicate a decline in global growth to about 3.3% in the medium term.
And the International Monetary Fund, in the month of April, sharply lowered its estimates for the growth of the global economy in 2022 due to the consequences of the war in Ukraine and warned that inflation will continue, especially in emerging countries, and the International Financial Authority said that the growth rate will reach 3.6 percent this year. down 0.8 percentage point from the January forecast.
As for inflation, the Fund expects it to reach 5.7 percent for developed countries (+1.8 percent) and 8.7 percent (+2.8 points) for emerging and developing economies. The two largest economies in the world will not escape a reduction in growth estimates, which fell in the United States by 0.3 point to 3.7 percent and China by 0.4 point to 4.4 percent.
The International Monetary Fund has also sharply lowered its growth forecast for the European region, in Britain, where inflation erodes the purchasing power of consumers and high interest rates limits growth, and the Fund said that gross domestic product is expected to rise by 3.7 percent in Britain, down One percentage point higher than the January estimate. This percentage is close to the UK government's estimate (3.8 percent). In the eurozone countries, the deterioration is greater, with it expecting to achieve a growth of 2.8 percent, compared to 3.9 percent, according to expectations in January. It cut growth estimates for Germany, which relies heavily on Russia for energy, by 1.7 percent to 2.1 percent.
The world is already facing problems related to inflation, due on the one hand to the loose monetary policy in many rich countries, and on the other hand to the supply problems exacerbated by the repercussions of the Corona pandemic, and the Russian invasion exacerbated the situation because Russia and Ukraine are sources of major commodity supplies of food and fuel.