Washington (AFP)

Rising energy prices are weighing on households but should not lead to a crisis similar to that of the 1970s, believes Gita Gopinath, the IMF's chief economist, who expects moderation "by now the end of the first quarter of 2022 ".

The recovery of the global economy is marked by a strong rebound in demand which collapsed last year with the paralysis of activity in an effort to keep the spread of the pandemic, Ms. Gopinath recalled during 'an interview with AFP.

A long, cold winter followed by a particularly hot summer led to greater demand in the energy sector and depleted stocks, especially gas reserves in Europe.

In addition, "this recovery is truly unique in its kind," said the economist of the International Monetary Fund.

Many sectors are struggling to find labor despite high demand, due in part to fears of being infected with Covid, which has led to significant disruptions in global supply chains.

"This kind of shortage feeds pressure on prices" in different parts of the world, in Germany, the United States, Japan, continues the economist.

The whole question is whether this is a phenomenon that will last or be reversed quickly.

- Worst case scenario?


"For now, even if in the short term, (...) during the few winter months, energy prices will be high, we expect them to come down again by the end of the first quarter. next year and into the second quarter, ”she said.

She admitted, however, that "the significant risk" was to have another harsh winter which would then lead to "much larger blackouts and blackouts which would have a much greater effect on the world".

Gita Gopinath, Chief Economist of the International Monetary Fund during an interview with AFP in Washington on October 12, 2021 PEDRO UGARTE AFP

"The worst-case scenario would be to have a particularly harsh winter in the northern hemisphere with increasing demand for energy. And at the same time, we would not have solved the problem of disruptions in production chains," he said. she nodded, further noting that the world is not immune to extreme weather events.

Last February, freezing cold, marked by polar temperatures and snowstorms, for example caused a surge in electricity consumption in the southern states of the United States.

Texas, which has a population of nearly 29 million, had been unable to meet the explosion in demand and hundreds of thousands of homes had been deprived of electricity.

However, Ms. Gopinath does not expect a crisis like that of the 1970s because "overall, the world depends much less on energy".

Gita Gopinath, Chief Economist of the International Monetary Fund during an interview with AFP in Washington on October 12, 2021 PEDRO UGARTE AFP

And "it would take a much larger increase in gas prices, for example, to (...) lead to (...) stagflation", that is to say very high inflation and stagnant growth, she observes.

For now, the markets have their eyes riveted on the price curve.

On October 6, the benchmark European price, the Dutch TTF, soared to 162.125 euros at the start of the European session, a record.

This price level is eight times higher than six months ago.

And on Monday, a barrel WTI (standard variety in the United States) closed above $ 80 for the first time since October 2014.

© 2021 AFP

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