Economist Abramov: the global economy faces stagflation due to the consequences of the pandemic

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The head of the laboratory of the Institute of Applied Economic Research of the RANEPA, Alexander Abramov, said that now world banks are obliged to prevent stagflation – a situation in which high inflation is combined with low economic growth, writes the Prime agency.

The measures that regulators took last week are insufficient: even with ultra-low interest rates, economic growth in the world faces a slowdown due to the consequences of the pandemic: rising energy prices, threats of lockdowns and supply disruptions, the economist explained.

Abramov believes that raising interest rates by central banks in these conditions will weaken economic growth even more. This will lead to a correction in the stock markets – primarily in the shares of high-tech companies.

Earlier, Tom Orlik, chief economist at Bloomberg Economics, said that global economic growth would be halved due to the impact of the new omicron strain of the coronavirus. According to the expert, Germany, France and Italy will experience the greatest burden due to outbreaks of COVID-19.