The double danger of slowing growth and high inflation, Stagflation, or stagflation, will hit the global economy this year as Russia’s war on Ukraine exacerbates the slowdown in the recovery from the coronavirus pandemic, according to research by the Financial Times.

According to the latest Brookings-FT tracker, rising price pressures, a slump in production expansion and falling confidence will all weigh on most countries.

As a result, policymakers will face “a serious dilemma,” said Eswar Prasad, a senior fellow at the Brookings Institution.

The IMF is expected to cut its forecasts for most countries this week as finance ministers and central bankers meet at the IMF and World Bank spring meetings to discuss how to deal with the worsening economic outlook.

Policymakers must figure out how to deal with rapidly rising prices and the dangers of raising interest rates at a time when debt levels are already high.

IMF chief Kristalina Georgieva on Thursday called the Ukraine war a ”huge setback“For the global economy.

Against a backdrop of soaring inflationary pressures and limited room for policy maneuver, 2022 has the potential to be “an apprehensive period of geopolitical adjustments, ongoing supply disruptions and financial market volatility,” Prasad said.

this Brookings-FT Tracker Index The Global Economic Recovery Index (Tiger) compares actual activity, financial markets and confidence indicators in the global economy and individual countries to their historical averages to see how better or worse current data are than normal.

In a twice-yearly series, the composite index shows a marked loss of growth momentum in both advanced and emerging economies since the end of 2021, confidence levels have also fallen from their peaks, and financial market performance has fallen recently.

Prasad said each of the world’s three major economic blocs is facing considerable difficulties. While U.S. spending remains strong and the labor market has returned to its pre-pandemic state, inflation poses serious difficulties for the Fed’s price stabilization mandate. Price growth surged to a 40-year high of 8.5% in March.

“The Fed faces a real risk of losing control of the inflation narrative and could be forced to tighten policy more aggressively than it has suggested, raising the risk of a significant slowdown in growth in 2023,” Prasad said.

China’s problems stem from its desire stick to its zero coronavirus strategy After a surge in cases of the more contagious Omicron variant. Lockdown measures such as strict restrictions in Shanghai threaten consumer spending, investment and production, while the potential for another easing of monetary policy will magnify longer-term risks to financial stability.

China is due to release first-quarter gross domestic product figures on Monday, which are widely expected to show that Beijing faces serious challenges in reaching its 5.5 percent growth target this year.

Confidence levels have fallen sharply for Europe, which is most vulnerable to the conflict in Ukraine and is struggling to reduce its reliance on Russian energy imports.

Prasad said there were no easy policy solutions and the will to act appeared to be in short supply.

“Keeping the global economy on a reasonable growth trajectory will require concerted action to address the underlying issues, including measures to limit the disruption caused by the pandemic, measures to ease geopolitical tensions, and targeted measures such as Infrastructure spending to improve long-term productivity, not long-term productivity. “Just to strengthen short-term demand,” he said.