Covid-19 and the war in Ukraine have reinforced the importance of public-sector clients to global banks. It is a familiar pattern at times of crisis. Societies turn to their governments when financial markets get choppy.
In 2022, many states face the challenge of resolving the inflationary after-effects of Covid support measures, the effects on inflation of supply-chain problems linked to the pandemic and higher energy prices due to the war in Ukraine.
“For the past 10 years, policymakers – at least in the developed world – have complained about the lack of any inflation. Now we have some,” says Daniel Zelikow, global head of public sector at JPMorgan.
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For poorer countries, the most serious impact of this war is on the price of food.