On Tuesday, the International Monetary Fund (IMF) released its report. The IMF downgraded its global growth forecast for 2022 as rising Covid-10 cases, supply chain disruptions, as well as higher inflation, hamper economic recovery.
Its report contains many interesting details about the global economy. The fund said it expects global gross domestic product (GDP) to decline from 5.9% in 2021 to 4.4% in 2022. Previously, the IMF expected the global GDP to grow by 4.9% in 2022.
Growth markdowns lead to the IMF’s modified outlook in the world’s two largest economies; the U.S. and China. The International Monetary Fund expects the world’s largest economy to grow by 4.0% this year, 1.2 percentage points lower than previously forecast as the country’s central bank moves to change its monetary policy, even as supply chain disruptions weigh on the economy.
Also, the updated outlook removed President Joe Biden’s signature Build Back Better fiscal policy package from its baseline projection. Biden’s party failed to pass the original bill.
International Monetary Fund and China
The International Monetary Fund also changed its position regarding the world’s second-largest economy. It expects the country’s economy to grow by 4.8% this year, down 0.8 percentage points. The IMF downgraded its forecast amid disruptions caused by its zero-Covid policy, as well as “projected financial stress” among its property developers.
Still, the International Monetary Fund upgraded its 2023 growth forecast. The IMF revised its forecast for 2023 by 0.2 percentage points to 3.8%. Nevertheless, the IMF warned that the estimate precluded the emergence of a new Covid variant. It said any pickup would depend on equitable global access to vaccines and health care.
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