Food prices increased by 13 percent as the price of bread jumped almost 28 percent and poultry prices rose by over 21 percent.Continue reading
As recently as January, the International Monetary Fund (IMF) had assumed that the global economy would recover from the second quarter of this year, as the new mutation of the coronavirus, Omicron, would only have a short-term effect. Contrary to earlier expectations, the outlook for the global economy in 2022 has deteriorated significantly since the organization’s last forecast. This is mainly due to Russia’s invasion of Ukraine, which is causing a tragic humanitarian crisis in Eastern Europe, as well as sanctions aimed at forcing Russia to end the war. In the Central and Eastern European region, Hungary and Poland will achieve the highest GDP growth this year, according to the World Economic Outlook (WEO) published Tuesday by the International Monetary Fund.
This article was originally published on our sister-site, Ungarn Heute.
The IMF has lowered its forecast for global economic growth this year to 3.6%. For the eurozone, GDP growth of 2.8% is expected this year, down 1.1 percentage points from the previous year’s forecast of 5.3%, and GDP growth of 2.3% in 2023, below the 2.5% estimated at the beginning of the year.
As we have reported before, the inflation forecast is very worrying. Both in Hungary and in other European countries, there is already record-high inflation, which may even rise further from May. The central bank expects inflation in Hungary to peak in July. The IMF expects inflation to accelerate to 10.3 percent this year from 5.1 percent last year (it was 3.6 percent in October) and to slow to 6.4 percent next year.
The unemployment rate will rise from 4.1 percent last year to 4.3 percent this year, and fall to 4.2 percent by 2023, according to the forecast.
The IMF forecasts the same growth rate for Poland this year as for Hungary, namely 3.7 percent, compared with 5.7 percent last year. In October, the IMF forecast a GDP growth of 5.1 percent in 2022. Next year, Poland’s economic growth could slow to 2.9 percent. Inflation in Poland could rise from 5.1 percent last year to 8.9 percent this year, and 10.3 percent next year. The unemployment rate could fall from 3.5 percent last year to 3.2 percent this year, and 3 percent next year.
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