In its new report on the outlook for the global economy, the International Monetary Fund confirmed a slowdown for 2022 and was pessimistic about 2023. In identifying the causes of the gloomier forecast, the IMF highlighted Russia’s war in Ukraine, pandemic-related supply disruptions and high inflation expectations.
Stagnation, anxiety and rising prices are a recipe for social and political instability. Concern is especially focused on the European Union and whether the bloc can remain united as it confronts these challenges. In times of crisis, the incentives for zero-sum thinking will strengthen, and weak national leaders will be tempted to name scapegoats abroad.