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The world economic outlook is not bright

Contrary to the expectations of many experts about a strong recovery in 2022, the global economy is facing many big impacts from the double shock. COVID-19 pandemic and the Ukrainian conflict. Rarely has the global growth forecast been revised downward as many times as it has since the beginning of the year. According to the assessment of many international organizations, the growth prospect from now to the end of the year is not high.

Major international financial institutions have made not very “bright” forecasts about the global economic outlook. The World Bank (WB) lowers its growth forecast world economy this year from 4.1% to 3.2%.

The International Monetary Fund (IMF) also lowered its forecast for global economic growth this year to 3.6%, down 0.8 percentage points from its forecast earlier this year.

Mr. Pierre Olivier Gourinchas, chief economist of the IMF, said: “There are three main reasons for the downgrade of global growth forecasts. First, the Russia-Ukraine conflict has raised the prices of energy and commodities around the world. , leading to less output and more inflation Second, rising inflation in most countries and is expected to persist, forcing central banks to tighten monetary policy controls Besides, there is the slowing growth of the Chinese economy with more frequent shutdowns due to the COVID-19 pandemic.”

The world economic outlook is not bright - Photo 1.

Major international financial institutions have made not very “bright” forecasts about the global economic outlook. Illustration – Photo: VNA.

Among the major economies, the IMF forecasts that US GDP will grow 3.7% from 5.7% last year. Meanwhile, China’s economy is forecasted to grow 4.4%, much lower than the 5.5% target set by the country.

Growth of eurozone countries slowed to 2.8% from 3.9 previously. In Asia, the IMF forecasts that the region will grow 4.9% this year, lower than the 6.5% rate in 2021. However, economic experts also believe that economic integration is strong. in the Asia-Pacific could become the new driving force for the world economy.

“Asia accounts for the majority of the global population and is also the world’s manufacturing hub. Many countries in the region are also at the forefront of the race towards the 4th Industrial Revolution. This is truly a feat. very good news for the rest of the world,” said Marcos Prado Troyjo, President of the New Development Bank (NDB).

The annual report at the Boao Forum for Asia 2022 at the end of April assessed that the Asian economy is still in the process of recovering. However, it also emphasized that the growth rate of the region may narrow, and at the same time it is necessary to effectively respond to major challenges such as the situation of the COVID-19 epidemic, the pace and intensity of monetary policy adjustment. of the US and Europe, the public debt problem of some countries and the supply of key goods…

Vietnam’s economy has many signs of improvement

In the common difficulties of the world, Vietnam, with the drastic management from the Government, the rise of enterprises is making strong recovery steps.

In the first 4 months of this year, the economy continued to recover and showed signs of improvement in a number of industries and fields. The epidemic situation gradually stabilized, along with support packages, economic recovery … have helped many businesses feel secure in production and get positive business results.

GDP growth in the first quarter was estimated at 5.03% over the same period; inflation was under control, consumer price index in the first 4 months increased by 2.1%; major financial, monetary and credit balances were secured, and state budget revenue achieved positive results. In the first four months of the year, nearly 49,600 new businesses were established, the highest level in the first four months of the year so far in Vietnam.

Foreign direct investment capital realized in Vietnam in the first 4 months of the year, is estimated at 5.92 billion USD, is the highest value in the first 4 months of the year in the years 2018 – 2022, creating an important driving force for growth. economy in 2022.

India focuses on strengthening internal economy

Across the region, pre-pandemic Asia was at the forefront of global growth. In the current context, this region is once again expected to lead the world economic recovery process. The impact is far-reaching but not without gamuts of hope. For example, India, last fiscal year, New Delhi achieved 8.9% growth. This year, the International Monetary Fund forecasts India’s growth will still reach 8.2%.

India’s economic recovery policies have been devised throughout the past time around a philosophy set forth by Prime Minister Narendra Modi called Atma Nirbar, or “self-reliance”. Accordingly, the thinking is that if the outside becomes unpredictable, it is time to go back to reforming our inner capacity.

Some prominent steps can be mentioned as cutting government spending through restructuring the apparatus. Or like tax policy, India has recently issued many tax incentives to support people and businesses, but at the same time, it has taken strong steps to combat tax loss.

As a result, budget revenue in the fiscal year ending March this year still reached a record of more than 350 billion USD, an increase of more than 30% compared to the previous fiscal year. In addition, it is also worth noting the determination to reduce the proportion of the informal sector in the economic structure.

The world economic outlook is not bright - Photo 3.

An automobile assembly plant in India. Photo: Livemint

In the past, the informal economy accounted for more than half of the Indian economy, but last year it accounted for only 15-20% of GDP. This is a positive signal. The formal fee economy is the economy of small businesses such as street vendors, sidewalk eateries, car repairs, etc. This not only creates a loss of tax revenue, but the main operating economy. weak on the background of simple, informal activities will inevitably lead to a lack of reinvestment for innovation and creativity.

Focusing on strengthening internal resources has helped increase the resilience of the Indian economy to the crisis. However, a number of risks are also pointed out by this country’s economists that need to be addressed. The first is the risk of loose monetary policy to stimulate the economy. Indian economists say that the priority target now needs to change to controlling inflation, not stimulating the economy anymore.

In addition, the central and state governments are also being advised to ensure that the important driver of production is electricity. This is a big problem for this country. In many states in India, electricity prices are jumping, having to alternately cut power due to lack of coal, and the infrastructure of renewable energy sources is not enough to meet.

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