Covid and inflation will maintain slow expansion in Brazil and in the world in 2022, says study

The global economy will continue to suffer, in 2022, from the effects of covid-19, in the wake of a possible emergence of other variants of the coronavirus, and inflation, a worldwide concern. This is what the global study “Country and Sector Risk Barometer 2022” predicts by the French Credit Insurance Company (Coface).

This explains, according to the study, the continued slow growth of the world economy this year, for which Coface forecasts an advance of 4.1% after an expansion of 5.5% in 2021 and a retraction of 3.4% in 2020

Worse will be for the Brazilian Gross Domestic Product (GDP), which, according to the French institution, will remain stable after having grown by 4.7% in 2021 and fallen by 4.1% in 2020.

The Coface Barometer predicts that inflation will be around 10% in Brazil this year, which will also happen in other BRICS countries (Russia, India, China and South Africa).

“Inflation should also be high in the richest economies, reaching close to 8% in the United States and close to 6% in the euro zone”, predicts the group of economists at Coface, which includes the economist of the Brazilian unit of the institution. , Patrícia Krause, who is leading the company’s annual press conference in Brazil this Thursday.

Global inflation changes status to persistent

Global inflation has changed its status from “transient” to “persistent”, although it cannot yet be considered as “permanent”, according to the Coface study released on Thursday.

For the company’s body of analysts, “one of the biggest impacts of high inflation will be on US monetary policy, as the Fed Federal Reserve, the US central bank, has warned that it will raise interest rates”.

As they write in the 2022 Country and Sector Risk Barometer, the effects will be greatest in emerging countries, where “tighter financial conditions plus a slowing global economy will create a dangerous cocktail for emerging markets.