“Bloomberg” expects the International Monetary Fund to significantly reduce its forecast for global economic growth in its next update.
"We are going to lower our expectations significantly, as rising food and energy prices will lead to higher food and energy prices, slowing capital flows to emerging markets, as well as the ongoing epidemic and slowdown in China, are making it even more difficult for policymakers." said Sila Pazar Basioglu, director of strategy, policy and review at the International Monetary Fund. She pointed out that "the difficulty of coordinating a global response to rising inflation and fears of recession, as the global economy is already subjected to one shock after another."
The International Monetary Fund has already lowered its forecast for global growth this year to 3.6 percent from 4.4 percent before the crisis in Ukraine, in a report last April; Central bankers around the world are finding it difficult to find the right response to price increases driven by supply problems.
"The path to a smooth landing for the global economy is narrowing, and while we believe that it is still a possible path, confirmation will not be very easy," said Hyun Sung Shin, head of research at the Bank for International Settlements. He stressed that "when central banks tighten monetary policy in a quick and decisive manner and have a prior response to inflation, this leads more to a smooth landing."
Source (Emirati Gulf Newspaper, Edited)
