The World Bank has reduced to 4.1% its global growth forecast for 2022, after 5.5% in 2021. It worries about a “brutal landing” of poor and emerging countries after the rebound of 2021. The crisis due to COVID-19 has already lost ten years of economic catch-up on developed economies.
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The crisis related to COVID-19 is far from over. Tuesday, January 11, the World Bank has revised by 0.2 points its global growth forecast for 2022 to 4.1%, after 5.5% in 2021. If all countries around the world are concerned by this decline, Ayhan Kose, an economist of the institution, emphasized their divergent trajectories: “Advanced countries are flying high while emerging markets and developing economies fly down and are lagging behind.” The International Monetary Fund (IMF). Worried, he, “possible economic turbulence” that could shake emerging economies in the coming months. In a note published on Monday, January 10, the institution located in Washington emphasizes in particular the risk of a tightening of American monetary policy, faster than expected, which could lead to capital flight from emerging economies and devaluation of their currencies. .
A scenario that may occur if overheating supply chains fail to reduce shortages and the rise in prices is accelerating in the United States, after having already reached 6.8% in one year In November 2021. At the beginning of January, the Fed suggested that its monetary tightening would be more important and rapid, and warned that it could, as early as March, increase its key rates.
This acceleration of the calendar could, according to the IMF, “shake financial markets”. The most exposed countries are those with “high levels of private and public debt, and exposure to currency fluctuations as well as lower current scales”, continues the institution. In the aftermath of the publication, Wednesday, January 5, the record of the last EDF meeting, the Turkish pounders, Thai Baht and Malaysian ringgit fell.
Rebalancing the External accounts
An increase in US rates could bring out the capital from emerging countries when they need it to finance their fragile recovery. It could also force them to take the same orientations to avoid a flight from capital and a collapse of their currencies. At the risk of sacrificing their recovery. In July 2021, the IMF calculated that global gross (GDP) domestic product could lose $ 4,500 billion (€ 3,970 billion) if such a decision was made before the pandemic is contained in emerging countries. In 2013, she had provoked a financial storm among emerging people.
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