Real GDP Growth
After the initial turbulence due to Covid-19, both advanced as well as emerging economies are signaling signs of stable GDP growth for the last two quarters. The IMF expects 2.2%/1.7% GDP growth in developed markets and 4.6/4.5% GDP growth in emerging markets in CY23E/CY24E.
Growth-Inflation Trade Off
Handling the pace of inflation is the focus of policy-makers. They are tracking the pace of growth. Also, they are keeping a close watch on the reasons for rising inflation. Policy-makers are trying to ascertain whether real demand or supply disruption is the cause behind the rising inflation
Inflationary Pressure
Inflationary pressure is to persist in the near-term, mainly due to Supply chain disruption, high energy prices, and robust revival in global demand. Average inflation for the last six months is above the inflation target of 2.00 for all the major economies, namely UK, EUROZONE (EZ) and US except Japan. It should start moderating at the starting of H2 CY22.
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