International Monetary Fund (IMF) in a fresh report dedicated to the restoration of the global economy from the effects of the coronavirus pandemic, predicted the world years of high prices and more rapid, compared with conventional levels, inflation. The document is published on the organization’s website.
So far, the IMF, as well as other financial institutions, adhered to the opinion that the current growth of inflation is a temporary phenomenon and will end together with the elimination of the effects of a pandemic. This was pointed out several factors, among which the deferred demand from the population, failures in supply chains, a severe situation in the labor market, as well as measures of support from world governments and central banks, which led to the active growth of the money supply in circulation.
The elimination of these factors is considered to lead to the normalization of the overall situation in the economy and the level of inflation. However, in the new report, the IMF expresses concerns that even overcoming the primary effects of the pandemic and restrictions will not solve the problem of inflation, which will still remain at a high level.
According to the authors, new problems can be caused by additional logistics failures and increase in housing prices, as well as the devaluation of the currencies of developing countries, which will lead to the rise in the cost of imports in them.
The positive factor of the IMF calls the spread of vaccinations from coronavirus and active vaccination of the population. However, the authors negotiate that the possible appearance of new strains can slow down recovery or stop it at all.