According to the IMF’s World Economic Outlook Update of July 2022, surging commodity prices and broadening price pressures may cause inflation to reach 6.6 per cent in 2022 in advanced economies and 9.5 per cent in emerging market and developing economies, posing a clear and present danger to macroeconomic stability.
The stagnation in lending is also due to banks’ adopting a more cautious policy in lending to households and businesses. The Italian banks participating in the Bank Lending Survey reported that in the fourth quarter of 2008 lending conditions tightened somewhat, while firms’ demand for credit was basically stagnant.