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The IMF rules out an “inflationary spiral” in Europe

Washington, Oct 20 (EFE) .- The International Monetary Fund (IMF) ruled out an “inflationary spiral” in Europe on Wednesday, as it expects recent price increases to moderate in the second quarter of 2022.

At a press conference to comment on regional economic prospects, the director of the IMF’s European Department, Alfred Kammer, insisted that this price hike is temporary and responds to a large extent to the rise in the cost of energy and the current disruptions in global supply chains.

“At this time we do not expect any inflation spiral in Europe,” stressed Kammer.

In his view, “the high inflation that is being registered now is mainly driven by energy prices”, which he predicted that “will dissipate during 2022”.

He acknowledged, however, that the price of gas has multiplied by five compared to last year, particularly in countries like Spain, with “dynamic” prices in which any “shock” in the wholesale energy production markets implies a very high transmission. fast to consumers.

This responds to several factors, among which he cited an “imbalance” between supply and demand and the issue of renewables, which are not always available, which means that gas must be used at times of increased demand.

He therefore recommended investing in energy storage and production “to avoid problems in the transition to a greener economy”: “It is valid for Spain, but also for Europe and worldwide,” said Kammer.

Regarding the price of oil, he indicated that it is returning “to the levels where it was before the pandemic, due to the strong demand,” which he assured that “it was to be expected.”

In its “Global Economic Outlook” report, presented last week, the Fund placed the estimated inflation for the euro zone at 2.2% by the end of this year and 1.8% by 2022.

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