Multiple downside risks weigh on global economic recovery in 2022(3)

Market research institutions generally believe that the Fed will start raising interest rates from March this year. The European Central Bank also announced earlier that it will end its emergency asset purchase program in response to the outbreak as scheduled.

The IMF pointed out that the Fed's early rate hike will put pressure on the currency exchange rates of emerging markets and developing economies. Higher interest rates will make borrowing more expensive globally, straining public finances. For economies with high foreign exchange debt, multiple factors, including tighter fiscal conditions, currency depreciation and rising imported inflation, will pose challenges.

IMF First Deputy Managing Director Gita Gopinath said in a blog post on the same day that policymakers in various economies need to closely monitor various economic data, prepare for emergencies, communicate in a timely manner and implement response policies. At the same time, all economies should carry out effective international cooperation to ensure that the world can get rid of the epidemic this year.

In addition, the IMF said that if the drag on economic growth gradually disappears in the second half of 2022, the global economy is expected to grow by 3.8% in 2023, an increase of 0.2 percentage points from the previous forecast.