Recovery blows up: IMF predicts global economic cooling inflation will not stop until 2023 - The world economies have been bearing the consequences of omicron and runaway inflation longer than expected, and that will take its toll on the recovery.
The International Monetary Fund has warned today of the cooling of the world economy, with a drastic cut in its growth forecasts for 2022.
"The global economy enters 2022 in a weaker position than expected," warns the IMF in its World Economic Outlook.
The agency led by Kristalina Georgieva has cut global growth for this year from 5.9% to 4.4%, at half a point.
The United States recorded the largest downward correction, limiting its expansion to 4% from the 5.2% forecast in October, after growing by 5.6% in 2021.
IMF predicts global economic cooling inflation
Spain is also not spared the axe in forecasts. The IMF has cut its growth forecast for Spain in 2022 from 6.3% to 5.8%.
This is a cut that calls into question the calculations of the Government, which expects Spain to grow this year by 7%. A real risk, since the macroeconomic picture and budgets depend on a forecast that could be inflated.
There are two causes that have blown up the recovery: omicron and inflation.
And precisely Spain is more exposed to them than other countries.
"As the new omicron variant spreads, countries have reintroduced mobility restrictions," the IMF explains.
These restrictions have resulted in the collapse of tourism and sectors linked to social interaction, such as trade or restoration, among other activities.
Impact of IMF predicts global economic cooling inflation in Spain
This impact has been especially noted in Spain, due to its enormous dependence on tourism, which contributes to 12% of GDP.
The second cause has to do with rising energy prices and the supply crisis (bottlenecks). For months, the world's economies have had to deal with an energy price at all-time highs and with problems in the supply of materials needed to produce.
This translates into higher production costs for companies, which transfer the increase to final sales prices, which has been skyrocketing inflation for months.
Again, Spain suffers more than other countries from the chaos of inflation. Spain is, according to data from the OECD, one of the countries in the world with the greatest energy dependence. More than 73% of the energy in Spain is purchased from other countries.
Prices rise cause IMF predicts global economic cooling inflation
At a time when the price of oil, gas, electricity... they continue to rise and set historical price records, the bill is even more noticeable in Spain.
For months, different organizations, such as the Bank of Spain, the ECB or the IMF have repeated ad nauseam that the episode of runaway inflation that we were experiencing was a transitory phenomenon. Half a year later, if anyone says it, it is with a small mouth.
The IMF has warned that inflation will last longer than expected. Moreover, it is not expected to stop its promotion until 2023. This means that, strongly, 2022 will continue to be a year of price increases.
"High price pressures are expected to persist longer," warned the IMF's first deputy managing director, Gita Gopinath, although she anticipates that these pressures will moderate over the course of this year and, assuming inflation expectations remain anchored, inflation is expected to decline in 2023.
