The central bank warned that inflation could still rise. (file photo)
[Asiantaeth Newyddion Ganolog]The world has gotten used to living with the epidemic, but the economy in 2023 will still not be quiet. The central bank’s report indicated that global economic growth will continue to slow this year, and the outlook faces four major downside risks. In particular, with the tight labor market in the United States and Europe and the continuation of the war between Russia and Ukraine, global inflation may still rise again.
Central Bank Governor Yang Jinlong will report to the Legislative Yuan’s Finance Committee on March 1. The written report will be released first, and the content will talk about the central bank’s views on domestic and foreign political and economic situations.
Please read on…
The central bank highlighted the fact that the majority of central banks in different countries have adopted tightening monetary policies at the same time to fight against high inflation, which has led to a gradual slowdown in global economic growth since October 2022; The region’s energy crisis has eased, and the outlook for the global economy has turned slightly optimistic.
However, the central bank reminds that the global economy still faces four major risks. The first is the tight labor market in the United States and Europe and the return of supply chains, which could cause inflation to heat up again. Extending the slowdown in economic growth.
Third, there are still downside risks in mainland China’s economy, which could affect the recovery of the global economy; fourthly, climate change has exacerbated uncertainty in the supply of goods, and geopolitical risks have also increased.
The central bank explained that the continued tight labor markets in the US and Europe could trigger a spiraling increase in wages and prices, together with the post-epidemic recovery in mainland China and the continuation of the Russia-Ukraine war, these could push goods up. prices, which can trigger an increase in global inflation.
In addition, in recent years, countries have strengthened the resilience of their own supply chains. With the return of supply chains to high-income countries, the central bank is concerned that production costs may increase, which is not conducive to cooling inflation. worldwide.
In addition to the above factors, the central bank also said that climate change has caused frequent natural disasters around the world, leading to greater uncertainty in energy and food supply, and Europe could face the risk of energy shortages still in the world. winter in the future, which will affect the global economy and inflation.
Although the drop in commodity prices such as crude oil is expected to ease the high inflationary pressure of last year, the central bank reminds that the uncertainty of the global economy is still high and must be closely monitored.
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