Global growth to slow as inflation bites: Poll

Global growth to slow as inflation bites: Poll

The uptick in inflation was led by vegetable prices (Representative image)



The global economy will expand more slowly than predicted three months ago, according to Reuters polls of over 500 economists, who said higher commodity prices and an escalation in the Russia-Ukraine war could prompt another downgrade.

Already under pressure from monetary tightening as central banks try to stem rising inflation, world economic output was dealt a body blow when Russia invaded Ukraine on Feb. 24, sending commodity prices through the roof and triggering waves of economic sanctions.

When asked to name the biggest two downside risks to the global economy this year, the top picks of roughly 200 respondents were persistently higher commodity prices and a further escalation in the Russia-Ukraine war.

They were closely followed by supply chain disruptions - exacerbated by the Russian invasion - followed by second-round inflation effects and over-eager central bankers.

"MASSIVE SUPPLY SHOCK"

Even without those future risks, median forecasts for global growth collected in this month's Reuters polls on over 45 economies were chopped to 3.5% this year and 3.4% for 2023 from 4.3% and 3.6% in a January poll.

That compares to an International Monetary Fund prediction of 3.6% growth in both years.

"Even before the