Inflation Bogey Blocking Recovery

By Anis Chowdhury and Jomo Kwame SundaramSYDNEY and KUALA LUMPUR, Oct 19 2021 (IPS) The bogey of inflation has been revived. Dubious pre-pandemic economic progress, fiscal constraints and vaccine apartheid were bad enough. Now, ostensibly anti-inflationary measures also threaten recovery and sustainable development. The International Monetary Fund (IMF) has revised downwards its latest global growth forecast. Its latest World Economic Outlook (WEO) warns of a “dangerous divergence” between richer and poorer countries. This has been exacerbated by, but has also worsened national fiscal disparities and the ‘great vaccine divide’. Anis ChowdhuryInflation bogey revived Meanwhile, there is growing talk of ‘stagflation’ – of rising inflation with slow growth and high unemployment, as in the 1970s. Meanwhile, The Economist warns of harmful “wage-price spirals” aggravating vicious circles of rising inflation and wage demands. But over 70%, or 152 of 209 economists polled believe rising inflation worldwide is due to temporary supply chain disruptions. Heads of major central banks – such as the US Federal Reserve, Bank of England and European Central Bank – concur. Although the IMF agrees, it also urges policymakers to “be on the lookout and be prepared to act, especially if…prolonged supply disruptions, rising commodity and housing prices, permanent and unfunded fiscal commitments, a de-anchoring of expectations, combined with mismeasurement of output gaps...
Source: IPS Inter Press Service - Health - Category: International Medicine & Public Health Authors: Tags: COVID-19 Development & Aid Economy & Trade Financial Crisis Global Headlines Health Labour Poverty & SDGs TerraViva United Nations Jomo Kwame Sundaram & Anis Chowdhury Source Type: news