IMF Downgrades Its Global Growth Outlook Over Supply Chain Concerns and COVID-19

Source: CNBC.

The International Monetary Fund (IMF) is now less bullish about the global economy for 2021 but forecasts moderate growth over the medium term. DXY  up +0.05%, EUR USD down -0.01%

• In its World Economic Outlook on Tuesday, the Fund stated it projects global gross domestic product to expand by 5.9% this year-0.1% lower than its July forecast.
• For 2022, the IMF retained its global growth forecast at 4.9%.
• The downgraded outlook for this year comes after supply chain challenges in advanced economics and worsening health conditions in emerging economies.
• In a blogpost, Gita Gopinath, chief economist at the IMF, stated that the moderate headline revision hides some significant downgrades for some countries.
• Gopinath further stated that the outlook for the low-income developing country group had weakened significantly due to worsening pandemic trends.
• The downgrade also shows more challenging near-term forecasts for the advanced economy group due to supply disruptions.
• The US is one of the countries in this position. The IMF revised the growth estimates of the economy downwards by 1% to 6%. 
• In 2022, the IMF expects a moderate global growth rate of 3.3% over the medium term.