“Demand will be and will need to be mitigated by cutting monetary accommodation,” she said. “And that has become very clear in recent months.”
In addition to the war, the pandemic and rising interest rates, China is facing a downturn in its real estate sector, and the Brazilian economy could be damaged by political turmoil related to the upcoming election, she said.
New data shows China’s economic growth and retail sales are slowing as the government imposes sweeping lockdowns to eradicate the coronavirus. As of April 11, 87 of China’s 100 largest cities had imposed some form of movement restrictions, according to Gavekal Dragonomics, an economic research firm.
The restrictions are again disrupting global supply chains for electronics, auto parts and other goods, and dampening Chinese imports of oil, food and consumer goods. China is the world’s largest oil importer, and cooling demand there caused the International Energy Agency last week to lower its forecasts for oil demand growth this year to 1.9 million barrels per day, against an increase of 5.6 million barrels per day last year.
The Russian invasion of Ukraine and the sanctions imposed to punish Moscow also threaten to plunge European economies into recession. Last week, forecasters from Germany’s top economic institutions predicted that a complete European ban on Russian energy imports would cause German production to contract by 2.2 percent next year and push inflation to 7.3 percent, a record for post-war Germany.
World trade growth is also expected to slow this year. The World Trade Organization expects global trade volumes to increase by 3 percent this year, compared to a previous forecast of 4.7 percent. But depending on how the pandemic and war unfold, trade growth could be as low as 0.5 percent or as high as 5.5 percent, Ngozi Okonjo-Iweala, the organization’s director-general, said at a meeting on Tuesday. press conference.
The group predicted that world trade growth would recover to 3.4 percent next year, although those estimates are also subject to change.
