The EDB does not expect excessive global inflation

09 September 2021

Moscow, 9 September 2021. The Eurasian Development Bank (EDB) does not expect excessive inflation at the global level. Evgeny Vinokurov, Chief Economist at the EDB and the Eurasian Fund for Stabilization and Development (EFSD), stated this at the IV Stolypin Forum.

“The 2020s will probably see a steadily higher inflation rate than the 2010s. This year we are witnessing the strongest inflationary pressure in a decade. In OECD countries, for example, inflation reached 4.2% year-on-year in July. We do not share the alarmist views for the coming years. But we also see the possibility of continuous increases in average inflation rates in the 2020s,” said Evgeny Vinokurov.

He believes that inflation in developed countries will be steadily higher than in the 2010s. “Not the 0–2% that the market got already used to in the 2010s, but perhaps 2–4%. This is what was the world’s normal before the global financial crisis. Such persistent inflation rates do not constitute a structural problem for the global economy. But in the moment they will require quite a substantial adjustment of the financial and real sectors,” stressed the Chief Economist of the EDB and the EFSD. 

“As for the 2020s, we expect the first half of the decade to be bad and the second one good. The decade is beginning with recovery from the effects of the coronavirus crisis. That said, local debt crises cannot be ruled out as early as 2023–2024 due to high debt accumulations and foreseeable interest rate hikes in developed countries. Developing countries that rely precisely on market borrowing are at risk. Russia and Kazakhstan, with their comfortably low levels of external debt, are, of course, outside the risk zone. There is a probability of a global structural crisis in the late 2020s. It could result from accumulated monetary policy imbalances in developed countries, high debt burdens around the world, increased protectionism or rising inequality. In the context of the Russian economy, what matters is the rapid growth of the green economy, which will lead to lower demand for renewables by the end of the decade,” Evgeny Vinokurov said.

Additional Information: 

The Eurasian Development Bank (EDB) is an international financial institution promoting integration and development in its member countries. For 15 years, the Bank has worked to strengthen and broaden economic ties and foster comprehensive development in its member countries – Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia, and Tajikistan. The EDB's charter capital totals US $7 billion. The EDB’s portfolio mainly consists of projects with an integration effect in the areas of transport infrastructure, digitalisation, green energy, agriculture, industry, and mechanical engineering. The Bank adheres to the UN Sustainable Development Goals and ESG principles in its operations. 

The EDB Media Centre: 

Azima Sapargaliyeva +7 (777) 750 00 08 (Almaty) 

Sergey Gorbachev +7 (916) 727 22 00 (Moscow)

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