The pandemic has continued to unevenly affect economies’ current account balances through the travel and transportation sectors as well as a shift from services to goods consumption, the ‘Pandemic, War, and Global Imbalances | 2022 IMF External Sector Report’ said.
Commodity prices recovered from the COVID-19 shock and started rising in 2021 with opposite effects on the external position of exporters and importers, a trend that the war in Ukraine is exacerbating this year.
The medium-term outlook for global current account balances is a gradual narrowing as the impact of the pandemic fades away, commodity prices normalise and fiscal consolidation in current account deficit economies progresses, the report noted.
However, this outlook is highly uncertain and subject to several risks, the report cautioned. Policies to promote external rebalancing differ with positions and needs of individual economies, it added.
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