Coronavirus outbreaks, poor vaccine access, weak policy pushes IMF to downgrade global economic outlook
- The International Monetary Fund (IMF) predicts the global economy will grow by 5.9 per cent this year, having predicted 6 per cent growth in July
- The IMF also marked down its forecast growth rate for China to 8 per cent this year from the 8.1 per cent growth predicted earlier this year
“Faultlines” in global economies caused by the coronavirus pandemic have persisted and recoveries have been “hobbled” by Delta variant outbreaks, the International Monetary Fund (IMF) said as it cut its worldwide growth forecast for the year.
Periodic coronavirus outbreaks, poor vaccine access and weak government policy support in certain parts of the world contributed to the IMF being forced to predict the global economy will grow by 5.9 per cent this year – down from a prediction of 6 per cent made in July. It did keep the forecast growth rate of 4.9 per cent in 2022 unchanged.
The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions
“Overall, risks to economic prospects have increased, and policy trade-offs have become more complex,” said IMF chief economist Gita Gopinath.
“The outlook for the low-income developing country group has darkened considerably due to worsening pandemic dynamics. The downgrade also reflects more difficult near-term prospects for the advanced economy group, in part due to supply disruptions.
“The dangerous divergence in economic prospects across countries remains a major concern.”
And while there were outliers, including commodity exporters meeting demand for raw materials in fast recovering countries like China, pandemic-related disruptions to “contact-intensive sectors” such as tourism have hurt workers and jobs, the IMF said.