Global Economic Growth in 2022 Will Be Halved by Inflation, Ukraine Crisis & China - Think Tank

The majority of the countries have already been suffering from historically high inflation since the end of 2021 amid continuing post-pandemic restoration and following rampant government spending to support citizens and the economies in 2020-2021. In 2022 the global economy is to face even more challenges.

The global economic growth will slow down significantly in 2022 and 2023 due to the effects of the spiking inflation, new coronavirus lockdowns in China and the Russian special military operation in Ukraine, Peterson Institute for International Economics (PIIE) said.

The think tank forecasted that the global growth of economies will reach 3.3% in 2022 – almost twice as low as 5.8% achieved in 2021. The US economy specifically will grow 3% this year and 2% in 2023, according to the PIIE.

"After a year of recovery from pandemic-related weakness, nearly all countries are seeing a significant slowing of economic growth", PIIE senior fellow, Karen Dynan, commented on the think tank's findings.

The global economies encountered the first factor that will contribute to the contraction of their growth back in 2021 – abnormally high inflation, which already prompted central banks including the Federal Reserve in the US to raise the interest rates. The Russian special operation in Ukraine will only exacerbate the problems that consumers are already facing with rising prices, the think tank said.

In addition to it, Chinese government's decision to put several cities on lockdowns to prevent the spread of new COVID-19 outbreaks in the country, will also slow down global growth EIIC said. Such moves will slow down economic growth in these cities amid general slowdown of the Chinese economy, the think tank noted.

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