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World inflation in 2022: estimated projections

It is no secret that we are currently witnessing an increase in the cost of living globally, which is why several banking institutions have released their projections for the coming months. For this reason, various institutions in the banking sector have communicated their projections for the coming months. Do you want to know more about global inflation in 2022? Continue below and pay attention!

Key drivers of world inflation in 2022

This year, inflation has been a phenomenon of study due to its high impact on the world economy. Price increases have reached all-time highs in Europe, the United States and Latin America.

In the euro zone, inflation reached 5.1% at the beginning of the year, an effect not seen since 1997.

In this regard, it is estimated that the main factors behind the current inflationary situation are consumer demand in the wake of the pandemic and the current war between Russia and Ukraine.

Experts affirm that there is supply-side inflation; that is, the cost of producing a unit of a good has increased. Thus, we could say that current inflation is caused, for example, by the rise in energy, gas and food prices.

 

You may also be interested in: Consequences of the Ukrainian war in Spain

 

IMF economic forecasts

Now, you are probably wondering what will happen in the coming months? Here is the forecast provided by the International Monetary Fund (IMF):

According to its recent “World Economic Outlook” report of July 2022, it is categorized as a bleak and uncertain outlook and economic growth is expected to slow from 6.1%, from 2021, to 3.2% in 2022, and to 2.9% by 2023.

Thus, it is understood that by this 2022 economic growth is expected to decelerate globally by 0.4 percentage points less than what was estimated in the previous World Economic Outlook report of April 2022.

In addition, with rising energy and food prices and the aforementioned imbalance between supply and demand keeping global inflation dormant, inflation is expected to reach 6.6% in advanced economies and 9.5% in emerging market economies.

In short, it represents an increase of 0.9 and 0.8 percentage points respectively for each economy.

The IMF considers the control of inflation as a priority for world leaders, which is why it refers to the imposition of a tighter monetary policy, as well as fiscal support that contributes to the benefit of the most vulnerable sectors.

 

You may also be interested in: Spain’s economic situation in 2022

 

Bank of Spain forecasts

In the specific case of Spain, the economic growth forecast for GDP is surrounded by a decrease of four tenths of a percentage point to 4.1% by 2022.

Likewise, the financial entity assures that the activity in the country slowed down more than expected during the first quarter of the year; which has brought evident consequences for the Spanish economy and an inflation rate of 7.2%.

According to the Quarterly Report on the Spanish Economy, GDP is expected to reach 2.8% in 2023 and 2.6% in 2024.

With respect to future inflation, a percentage of 2.6% is forecast for 2023, and 1.8% for 2024. However, various factors of uncertainty are considered that could affect the economic situation in the country, such as the high inflation recorded in May 2022 (8.7%), and the duration between the war in Russia and Ukraine.

For its part, the Organization for Economic Cooperation and Development (OECD) projects a 2.2% decline in Spain’s economic growth by 2023 (instead of 3.8%), and considers that average inflation will remain at 8.1% this year and 4.8% the following year.

In addition, the Bank of Spain highlights the importance of European funds for the normalization of monetary policy at a global level and the constant monitoring of activities in the various economies.

 

You may also be interested in: Inflation in Spain: causes and current measures

 

The truth is that the rising cost of living is a reality that surrounds us worldwide and affects us both personally and in business. Therefore, you should not overlook the economic news, and in TAS Consultancy we offer you the best articles to keep you up to date. Enter here and check our blog!

 

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