The IMF projects economic fallout from the crises of the last four years, although estimates vary from country to country. Post-pandemic economies were devastated, and some economies have been able to recover fully, but the fallout is now expected to be greater in developing countries, many of which are still struggling to turn the page on the pandemic and cost of living crises.

The stagnation in economic growth can be explained by supply-side developments, in particular the dissipation of energy price shocks and the remarkable rebound in labor supply contributed to by large migration flows in many advanced economies, but not in developing countries.

On top of oil prices rising recently, due in part to geopolitical tensions, and services inflation remaining stubbornly high, new trade restrictions on international exports could also push up product inflation.

Global growth bottomed out at the end of 2022, at 2.3%, shortly after median headline inflation peaked at 9.4%. According to projections in the latest World Economic Outlook report, growth for this year and next will hold steady at around 3.2%, while median headline inflation will decline from 2.8% at the end of 2024 to 2.4% at the end of 2025.

Translated by: A.M