Rising food and energy prices, the reduction in capital flowing to emerging markets, the ongoing epidemic and the economic slowdown in China are making the situation “much more challenging” for policymakers, according to Turkish economist Jaila Perebsivio, the organization’s director of strategy, policy and audit. At a panel held today (Sunday) in Bali, Indonesia, she said: “It is shock after shock after shock, which is very damaging to the world economy.”
According to a Bloomberg report, Perezevcio said the remarks after 20 finance ministers and central bank governors ended their meeting on Saturday without giving an official announcement regarding the global growth forecast. She stressed the difficulty of coordinating a global response to rising inflation and fears of recession.
The International Monetary Fund had already cut its global growth forecast in April from 4.4% before the war in Ukraine to 3.6% in April. According to Perebsaciolo, in a review to be published this month, “we will lower our forecast significantly.”
Central banks around the world are having a hard time finding a solution to the price increases that result from problems in the supply chain. “The path to a soft landing is getting narrower. We still think this is a possible path, but certainly not an easy one,” said Hyun Sung Shin, head of research at the Bank for International Settlements (BIS). “When central banks adopt a quick and decisive monetary policy and have a preliminary response to inflation, it contributes to a soft landing.”
Indonesia, the country’s system of the G-20 Forum this year, has become an exception in the landscape: it does not raise its already low interest rates. Perry Vargio, the governor of the Central Bank of Indonesia, explained: Raising interest rates could lead the country, which has just emerged from a plague-driven recession, to stagnation.