Since the start of the Covid-19 pandemic over 2 years ago, the Irish government have made an effort strengthen the economy. Unfortunately, the decisions that were made may have the opposite effect. There is an uncertainty around inflation rates and the future of economic growth in Ireland. The International Monetary Fund (IMF) has made many predictions on this matter. Read on for more information.
High debt could slow countries’ recoveries – IMF
According to the IMF, businesses and individuals all over the world have accumulated debt since the start of the pandemic. This could slow economic recoveries from the pandemic crisis.
Government actions intended to help the economy may have resulted in higher debt levels for some sectors. Including those most disrupted by the virus, like tourism and restaurants, as well as low income households.
In a chapter of its World Economic Outlook, the IMF said the debt burden could hold growth back in developed countries by 0.9% and in emerging markets by 1.3% over the next three years. Read the full article here for more information, including responses from lenders.
IMF cuts global growth forecast, warns of inflation danger
The IMF has changed its predictions on economic growth. They cut it down by nearly a full percentage point, citing Russia’s war in Ukraine as the reason. They continue to warn that inflation is now a “clear and present danger” for many countries.
In its latest World Economic Outlook, the IMF said to expect slower growth and increased inflation due to the war. They also warned that its forecast was marked by “unusually high uncertainty”. The potential boost in inflation and rising prices could trigger social unrest.
The global lender, which changed its forecasts for the second time this year, said it now projects global growth of 3.6% in 2022 and 2023. This is a drop of 0.8 and 0.2 percentage points from its January forecast, due to impacts on Russia, Ukraine and global spillovers. Read the full article here.
Irish economy to grow, inflation to fall next year – IMF
The IMF expects economic growth in Ireland to “remain strong”. Regardless, concerns remain regarding risks of substantial uncertainty due to the fall-out from the ongoing war in Ukraine.
The IMF forecasts growth in GDP (Gross Domestic Product) terms of 6% this year and 5% next year. It expects inflation to average 6.5% this year before falling to 2.8% next year. Officials from the IMF have been in Ireland for the past ten days as part of its annual ‘Article IV Mission,’ which is a kind of health-check on the economy.
In a statement to coincide with the conclusion of its mission, the IMF says several pre-pandemic challenges in the economy remain, including an insufficient supply of housing. Read here for further views on investments and social services.
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