London, Tuesday, 19 April 2022
As the war between Russia and Ukraine continues, the International Monetary Fund (IMF) decreased its world economic growth prediction for 2022.
According to the World Economic Outlook report released on Tuesday, the global economy will grow by 3.6 percent this year, down 0.8 percentage point from the prior projection of 4.4 percent in January.
The analysis, headlined War Sets Back the Global Recovery, stated that "economic damage from the conflict will contribute to a severe slowdown in global growth in 2022."
"A catastrophic double-digit drop in GDP for Ukraine and a substantial contraction in Russia are most than likely, as are global spillovers through commodities markets, trade, and financial channels," the report continued.
According to the IMF, the war slows GDP and raises inflation since fuel and food costs rise rapidly, disproportionately affecting low-income countries.
"Inflationary pressures will make it more difficult for central banks to strike a balance between managing pricing pressures and preserving growth.
As central banks tighten policy, interest rates are projected to rise, putting pressure on emerging market and developing economies "It was stated.
Due to war-induced commodity price hikes and broadening pricing pressures, the IMF predicts that inflation will remain high for longer than projected.
Inflation is expected to be 5.7 percent in advanced nations and 8.7 percent in emerging market and developing economies in 2022, which is 1.8 and 2.8 percentage points higher than January predictions.
While the US economy is likely to grow 3.7 percent this year, down from 4 percent previously forecast, the UK economy is expected to grow 3.7 percent, down from 4.7 percent previously forecast.
The economy of the Eurozone is expected to grow at a rate of 2.8 percent, down from the earlier prediction of 3.9 percent. Germany is expected to grow at a rate of 2.1 percent, down from 3.8 percent last year.
The Turkish economy is expected to grow by 2.7 percent this year, down from 3.3 percent previously predicted.
Russia, on the other hand, is likely to see its GDP drop by 8.5 percent this year, down from a January prediction of 2.8 percent growth.
(Written and edited by: The Decision Maker)