UKRAINE WAR & NEW WAVES OF INFECTION WILL SLOW ECONOMIC RECOVERY- IMF

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• Food prices in the country may continue to soar till 2023
• Meanwhile, Eswatini’s GDP Growth Forecast has been revised from 1.7% to 2.1% by IMF

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Photo Credit: https://www.imf.org/en/Home

By Ntokozo Nkambule

The International Monetary Fund (IMF) says that the possibility of new COVID-19 infections may slow global economic recovery. The fund states that this coupled with the current Russia & Ukraine war does not auger well economically for the world.

This is contained in the IMF’s World Economic Outlook Report, April 2022 titled “War Sets Back the Global Recovery”. The IMF projects global growth to slow from an estimated 6.1% in 2021 to 3.6 percent in 2022 and 2023. This is 0.8 and 0.2 percentage points lower for 2022 and 2023 than in the January World Economic Forum Update. The report notes that the war is accompanied by high uncertainty about the global outlook. “Although many countries appear to be moving past the acute phase of the pandemic, new variants could again lead to waves of infection and further disruption” notes the IMF April report.

The report outlines that war-induced commodity price increases and broadening price pressures have led to 2022 inflation projections of 5.7 percent in advanced economies and 8.7 percent in emerging market and developing economies. As a result, the IMF notes that the war in Ukraine is likely to lead to inflation remaining elevated longer than in previous forecasts. “In the case of inflation forecast, with the impact of the war in Ukraine and broadening of price pressures, inflation is expected to remain elevated for longer than in the previous forecast. The conflict is likely to have a protracted on commodity prices, affecting oil and gas prices more severely in 2022 and food prices well into 2023” states the IMF.

Despite all this, the IMF has revised Eswatini’s Real GDP growth forecast from 1.7% to 2.1%. Real GDP refers to a macroeconomic statistic that measures the value of the goods and services produced by an economy in a specific period, adjusted for inflation.

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