Global growth forecast downgraded by the IMF


Forecasts of a global economic recovery are largely due to rising debt levels and record inflation that prevents growth-leading countries from resolving persistent supply chain disruptions and other related issues in the United States and China. Was shattered by the challenges of.

“This year’s global growth rate is 0.5 points higher than previously predicted, primarily due to downgrades in the United States and China,” Gita Gopinato, a second source at the International Monetary Fund (IMF), said in a blog. We expect it to be as low as 4.4%. ” Position on Tuesday.

According to Gopinus, U.S.’s usual influential support has been hit by multiple factors constraining the economic revival, and downgraded estimates indicate a better spending bill for the Biden administration and future interest rate hikes. Is diminishing the country’s outlook for legislation.

Global growth is expected to slow to 3.8% in 2023, coupled with major real estate defaults and a weak recovery in domestic consumption from China, the world’s second-largest economy. This is a recovery from the previously predicted 3.6% as pandemic restrictions have begun to be relaxed. Under Omicron.

With mild symptoms, lower hospitalization rates, and lower mortality rates, Omicron is no longer considered a major problem, but it contributes significantly to labor shortages and restricted mobility. The IMF’s latest global economic outlook predicts that this variant will impact economic activity in the first quarter of 2022, but that the variant in the second quarter of 2022 is less important.

Global production is projected to be 4.4% and 3.8% in 2022 and 2023, respectively, down from 5.9% in 2021. US GDP growth was 5.6% last year and is expected to be 4.0% and 2.6% this year. The UK led the list with growth of 7.2% last year, while Spain is touted as strong among developed countries with a 5.8% increase in GDP.

For emerging markets, India will lead the list with 9.1% growth in 2021 and the same growth is expected in 2022. China managed 8.1% last year, dropping to 4.8% in 2022, but even better at 5.2% in 2023.

“To deal with the many challenges facing the global economy, it is imperative to break the pandemic dominance,” Gopinus said. “Currently, only 4% of the population of low-income countries is fully vaccinated, compared to 70% of high-income countries.” The spread of vaccines will cause global economic loss by 2024. It was reduced to about $ 13.8 trillion, resulting in a total of 5.5 million deaths.

Gopinath proposes that the local economy offers unique advantages in combating inflation while ensuring a stable pace of growth. “To achieve our economic goals, both fiscal and monetary policy need to work together,” she said.

To curb inflation, “extraordinary monetary policy support” must be abolished. Central banks around the world are gradually raising interest rates. Emerging economies need to be prepared for higher interest rates on foreign currency borrowing and lending debt.

Gopinath warned that low-income countries would find it increasingly difficult to repay existing high-level debt. To this end, the G20, the world’s largest collection of economies, needs to respond to debt restructuring and related negotiations.

“Policymakers must carefully monitor a wide range of incoming economic data, be prepared for contingencies, and be prepared to communicate and implement policy changes with urgent notice,” she said. I did.

Naveen Athrappully

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Naveen Athrappully is a news reporter covering business and global events in The Epoch Times.

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