Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Recovery disrupted: IMF cuts global economic growth forecast

Recovery disrupted: IMF cuts global economic growth forecast

Cut to global forecast largely reflects downward revisions to US and China outlooks.

The global economy is entering 2022 “in a weaker position than previously expected,” the International Monetary Fund warned on Tuesday, as it downgraded its global growth outlook largely due to clouds gathering over the recoveries in the United States and China.

The IMF’s latest World Economic Outlook calls for the global growth to downshift from 5.9 percent in 2021 to 4.4 percent this year. The 2022 forecast is half a percentage point lower than the Fund’s October outlook and largely reflects forecast markdowns for the world’s two largest economies.

The Fund saw the US economy growing 4.0 percent this year. That was 1.2 percentage points lower than its October call and reflected the failure to pass President Joe Biden’s Build Back Better spending plan, the Federal Reserve’s unwinding of pandemic stimulus measures, and continuing supply shortages that are driving inflation.

The IMF sees China’s economy growing 4.8 percent this year – 0.8 percentage points lower than its October forecast – thanks to the country’s business-sapping, zero-tolerance COVID-19 policy, and ongoing stress in its heavily indebted property sector.

Inflation, risks, and bright spots


Inflation has proven to be more persistent than the IMF bargained for back in October, thanks to continuing supply chain disruptions and high energy prices. The Fund sees those persisting this year, but gradually decreasing if inflation expectations remain anchored, “supply-demand imbalances wane in 2022” and central banks like the US Federal Reserve raise borrowing costs to rein in rising prices.

But as always, there are risks to the outlook, said the IMF, such as new COVID-19 variants that could prolong the pandemic and introduce fresh economic disruptions. Supply chain snarls, volatile energy prices, and localised wage pressures could create more uncertainty around inflation, said the Fund, while interest rate increases in advanced economies such as the US could negatively affect emerging and developing economies.

“Rising geopolitical tensions and social unrest also pose risks to the outlook,” IMF First Deputy Managing Director Gita Gopinath told reporters during a virtual news conference on Tuesday.

Gopinath said that total economic losses from the pandemic are expected to be close to $13.8 trillion through 2024. She also highlighted a recurring theme the Fund has raised since the global economy started its long slog back to pre-pandemic health, namely the widening recovery gap between richer and poorer nations.

“Even as recoveries continue, the troubling divergence in prospects across countries persists,” said Gopinath, noting that advanced economies are expected to return to their pre-pandemic trends this year, while several emerging markets and developing economies “are projected to have sizeable output losses into the medium term.”

The IMF downgraded its outlook for Brazil and Mexico, Latin America’s biggest economies, as well as South Africa.

While the overall trend for the globe is a recovery downshift, the IMF upgraded the outlook for India. It also sees the Middle East and North Africa getting a performance boost this year from higher energy prices.

“The MENA region is one where we actually have an upgrade for this year, so we’re expecting growth to be 4.4 which is an upgrade of point three,” Petya Koeva Brooks, deputy director at the IMF’s research department told reporters. “The main reason for that is the improved prospects for growth in oil exporters, which is again linked directly to the higher oil prices.”

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
JD Vance Warns Europe Faces “Civilizational Suicide” Over Open Borders and Speech Limits
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
Trump Administration Finalizes Broad Tariff Increases on Global Trade Partners
JD.com Launches €2.2 Billion Bid for German Electronics Retailer Ceconomy
Azerbaijan Proceeds with Plan to Legalise Casinos on Artificial Islands
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
×