Increased uncertainty
The Uncertainty Index is constructed by searching 143 Economist Intelligence Unit country reports for references to “uncertain,” “uncertainty,” and “uncertainties.” The monthly index indicates that:
- Ukrainian war-related uncertainty accounts now for 40 per cent of the global total;
- While initially uncertainty was higher in European countries compared with those elsewhere, currently the gap across regions has narrowed, as the economic spillovers of the war are affecting more countries.
This increase is a bad sign for growth. Our research finds that such increases foreshadow significant output declines. Based on our estimates, the rise in uncertainty in the first quarter could be enough to reduce full-year global growth by up to 0.35 percentage point.
Global Economic Uncertainty, Surging Amid War, May Slow Growth
By: Hites Ahir, Nicholas Bloom, Davide Furceri
Loss of growth momentum
The latest update of the Brookings-Financial Times Tracking Indexes for the Global Economic Recovery (TIGER) shows an overall loss of growth momentum.
- In the U.S. high oil prices, yield curve inversion, and a flailing stock market are all signs of and feed into a sense of impending difficult times;
- In China consumer demand, investment, and production are all showing signs of weakening;
- German economy’s strong rebound is at risk if energy supplies, due to a Russian oil and gas embargo, diminish;
- Japan’s consumption-driven rebound has been derailed by the disruptive effects of omicron;
- The U.K. economy now faces a difficult period ahead with rising inflation, higher taxes, and supply chain disruptions;
- India’s sharp economic rebound, might be at risk due to high inflation and rising oil prices.
April 2022 update to TIGER: Policymakers face grim quandaries as storm clouds gather
By: Aryan Khanna, Eswar Prasad – Cornell University
