Global growth prospects worsen due to inflation, war, pandemic: IMF

By Ovunc Kutlu

ANKARA (AA) - Global growth prospects have worsened due to effects of inflation, Russia's war on Ukraine and the coronavirus pandemic, the International Monetary Fund (IMF) said in a statement on Tuesday.

Overall risks to economic prospects have increased sharply and policy trade-offs have become more challenging, the statement said, as the spring meetings of the IMF and World Bank began in Washington, DC.

IMF Chief Economist Pierre-Olivier Gourinchas said that the war in Ukraine is raising energy and commodity prices around the world and is leading to less production and more inflation.

"Inflation is higher in most countries and is expected to persist longer. In addition, we have a slowdown of the Chinese economy with more frequent lockdowns due to omicron that is weighing down and then also elevated price pressures in many parts of the world or leading central banks to tighten monetary policy controls," he added.

Gourinchas warned that if the war escalates or the sanctions become broader, this would weigh down on global economic activity.

He stressed that monetary tightening by central banks, as a response to record high inflation, could weigh down on output and economic activity, and cause more financial instability.