“We are heading towards the unfavorable scenario,” assured the International Monetary Fund.
(AFP / MANDEL NGAN)
The continuation of the conflict in the Middle East and its share of disruptions to world trade risk resulting in less growth and more inflation, the International Monetary Fund (IMF) warned on Thursday, May 15.
The organization’s latest projections, released last month,
were counting on global growth limited to 3.1
% this year due to the conflict and the blockage of energy flows that it caused in the Gulf.
The IMF warned, however, that the world economy risked sliding towards a more “unfavorable” scenario if the war were to last. The organization’s spokesperson, Julie Kozack, said Thursday that
“we are heading towards the unfavorable scenario”
.
Fear of a snowball effect
“Inflation expectations remain reasonably well anchored and
financial conditions remain accommodating
“, she tempered during her regular press briefing.
Economic players, in particular central banks, monitor the way households and investors perceive future inflation because this risks modifying their current behavior and creating a deleterious snowball effect (for example if companies take the lead by increasing their prices).
The IMF will update its global economic forecasts in July.
