Multiple downside risks weigh on global economic recovery in 2022(2)

Second, high inflation continues to plague the global economy. The report shows that supply chain bottlenecks in the United States will continue in 2021, with port congestion, land transportation restrictions and increased consumer demand leading to price increases; fossil fuel prices in Europe have almost doubled, and energy costs have risen sharply; in sub-Saharan Africa, food prices continue to rise ; In Latin America and the Caribbean, higher prices for imported goods also contributed to an uptick in inflation.

The IMF predicts that global inflation may remain high in the short term, and it is not expected to fall back until 2023. However, with the improvement of supply in related industries, the gradual shift of demand from commodity consumption to service consumption, and the withdrawal of some economies from unconventional policies during the epidemic, the global supply and demand imbalance is expected to ease, and the inflation situation may improve.

In addition, under the high inflation environment, the expectation of monetary policy tightening in some major economies is becoming more and more obvious, which will lead to the tightening of the global financial environment. At present, the Federal Reserve has decided to speed up the reduction in the scale of asset purchases and release the signal of raising the federal funds rate in advance.