“World Economic Outlook” is a twice-yearly report by the International Monetary Fund. The April 2022 edition is subtitled “War Sets Back the Global Recovery.”
The conflict in Ukraine has generated a humanitarian disaster with economic consequences that will slow down the global economy and elevate inflation. Fuel and food prices have risen significantly, for example.
According to IMF estimates, the worldwide economy will decelerate from 6.1% growth in 2021 to 3.6% in 2022 and 2023 — 0.8 and 0.2 percentage points lower than its January 2022 forecast.
The IMF’s inflation predictions for 2022 are 5.7% in advanced economies and 8.7% in emerging market and developing economies.
Although the IMF expects it to ease eventually, inflation could be higher in the short term for various reasons, including worsening supply-demand mismatches and commodity price hikes. Furthermore, both the war and renewed pandemic breakouts could extend supply disruptions, raising costs even more.
According to the IMF forecast, the global economy will effectively flatline this year as Europe enters a recession, China slows substantially, and U.S. financial conditions tighten. On a purchasing power parity basis, the growth of global gross domestic product is expected to be 3.6% in 2022.
Bloomberg tracks global fuel prices, including the comparison of gasoline to diesel. According to Bloomberg’s data, gasoline prices in northwest Europe have risen significantly and are now higher than diesel, a change from prior periods.