World Bank: “Strong slowdown in global economic growth”. Inflation and an increase in inequalities weigh heavily

The World Bank it reduces its estimates on global economic growth which, according to forecasts, this year will stop at 4,1% and no longer at the 4.3% assumed last June. In 2023, global GDP is expected to increase by 3.2%. According to the Bank, the world economy is entering a “Pronounced slowdown” following the consequences of Covid and the reduction in support from central banks and governments. “Rising inflation, debt and income inequality it could threaten recovery in emerging and developing economies, ”the organization says. “There is a serious slowdown going on,” the chief economist said Ayhan Kose. The global economy “moves on two different routes: advanced economies fly high while emerging markets and developing economies are in trouble”.

In terms of inflation, the OECD noted today how it has continued to increase until it reaches 5.8% in November 2021, which is the highest rate of the latter 25 years old, after 5.2% in October e 1.2% in November 2020. Among the 37 member countries of the Organization, the increase was particularly strong in United States (6.8% in November against 6.2% in October), the highest level since June 1982. Strong increase also in eurozone (4.9% in November against 4.1% in October and -0.3% a year earlier) which, however, remains below the OECD average. In Italy alone, the rate stood at 3,7% against 3% in October. In all G7 countries, the OECD writes, inflation has been fueled mainly by rising energy prices.

“High inflation is a threat to maximum employment,” the president of the company said today Federal Reserve, the US central bank, Jerome Powell, ensuring that the Fed will use its tools against rising prices. “If more aggressive rate hikes are needed to cool inflation, the Fed will do them. If inflation persists ”and more rate hikes are needed,“ we will do it, ”explained Powell. In 2022 we will “normalize” monetary policy: The Fed will put an end to asset purchases in March and could likely start reducing its balance sheet later in the year, the Fed governor said.

In Europe, Joachim Nagel the new president of the Bundesbank, the German central bank, said today “One thing is clear: if price stability requires it, the ECB must act and adjust its monetary policy course “. Nagel claimed to be worried about inflation rates and to “see the danger that these remain tall longer than what is currently expected “. “In all cases, monetary policy must remain vigilant,” Nagel continued, adding that “Citizens have a lot less money left in their wallets. Many people are worried about this loss of purchasing power ”.

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