According to an exclusive study by the Financial Times, the sharp global backlash from the coronavirus recession “seems to be at risk of stall” amid supply bottlenecks, rising energy prices and rising inflation. ..
Global growth gained historic momentum in early 2021, according to the latest report, but with China, the world’s two largest economies, as the Covid-19 threat remains on the global economy. It is currently slowing down in the United States. Brookings-FT Tracking Index..
Survey results show that policy makers simply cannot increase purchasing power without serious risk.
Eswar Prasad, Senior Fellow at the Brookings Institution, said: “Policies in many major economies face the difficult challenge of supporting growth while curbing inflation.
“Additional stimulus, especially monetary easing, can create an increasingly unfavorable trade-off between short-term benefits and long-term vulnerabilities.”
Brookings-FT Tracking Index for Global Economic Recovery (Tiger) compares real-world activity, financial markets and confidence indicators with historical averages for both the global economy and countries, and data for the current period are normal To grasp to some extent. ..
The latest bi-annual update shows that the success of Covid vaccination has given rise to confidence and a sharp recovery in growth since March in developed and emerging economies.
Vaccine deployment to emerging markets and low-income countries was far from complete, but economic and financial data showed that despite the pandemic, there seemed to be a short-term, rapid recession due to the coronavirus in the past. It has reached the highest level in the series in the last few months.
However, recent supply shortages, rising energy prices and rising inflation have created new problems for the global economy. This week’s annual meeting The World Bank, IMF Finance Ministers and Central Bankers meet in a slim, but face-to-face gathering in Washington.
Recent economic news has stopped momentum, financial markets have lost their brilliance in recent months, and households and businesses have become increasingly sluggish as fears of a slowing recovery have increased.
Developed countries hit these uplifts on the road as they approached the recovery of lost production from the crisis that had historically suggested a promising recovery. But in emerging and low-income countries, signs of long-term scars are becoming more apparent, especially if governments and central banks cannot easily boost demand without facing even more difficult inflationary pressures.
“Rising energy prices symbolize problems caused by supply turmoil that could ultimately undermine aggregate demand, especially if central banks are forced to take more aggressive action to curb inflation. We do, “said Prasad.
In the United States, the latest official data showed Work recovery is stalled The Federal Reserve Board sees the need to take a more aggressive stance on financial support amid continued high inflation, while corporate and consumer confidence for the second straight month in September. The decline in sensation suggests a softening of the growth outlook.
In China, the government is working on sporadic outbreaks of delta coronavirus variants and is making new attempts to rebalance the economy from investment to consumption in the face of energy shortages. These trends are increasing financial volatility, especially in the real estate sector, and undermining the momentum of economic growth.
In Europe, the eurozone and the UK, which enjoyed a welcome backlash from spring, boosted by early vaccination campaigns, appear to have seen a sharp slowdown in strong summer growth.
As global growth is declining, according to Prasad, the government will carefully manage demand so that it does not run ahead of constrained supplies, while at the same time productivity and long-term. We need to look for ways to improve our growth outlook. Meanwhile, they faced “difficult policy trade-offs.”
Global economic recovery due to supply pressures, energy costs and inflation
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