KIEP downgrades 2022 growth forecast for global economy to 3.5%
Updated: 2022-05-18 05:04:49 KST
The Korea Institute for International Economic Policy has revised its 2022 growth forecast for the global economy to three.five percent down by one.one-percentage points from its earlier forecast last November.
In its report released Tuesday, the state-run think tank cited geopolitical disputes stemming from the prolonged Russian invasion of Ukraine as well as tightening of fiscal policies of major economies as its main reasons.
It said it's having a heavy toll on the global economic recovery path that's currently struggling with inflation and pandemic-induced global supply chain disruptions.
Also uncertainties stemming from a faster-than-expected key rate increases by the U.S. Federal Reserve are pressuring the Korean economy this year.
A widening gap in the two countries' key interest rates are likely to impact the amount of capital flow in Korea, which has aggressively raised its key rate five times since last July to one.five percent in April to curb massive household debt estimated to be at around one.five trillion U.S. dollars.
Last month, the International Monetary Fund lowered its estimate to three.six percent from its earlier forecast of four.four percent for similar reasons while also citing slow growth in China.
In March, the OECD has also signaled that it could lower its growth forecast by one-percentage points from its initial estimate of four.five percent.
Kim Ji-yeon, Arirang News.