The International Monetary Fund (IMF) has downgraded its global economic growth forecast for the year, weighed down by concerns of debt and inflation amid the COVID-19 pandemic.
- IMF Chief Kristalina Georgieva said the agency now expects global economic growth slightly below 6%, its forecast in July.
- Georgieva said the main concern is the “Great Vaccination Divide,” with a number of countries receiving limited access to COVID-19 vaccines.
- Advanced economies are now predicted to return to pre-pandemic levels by 2022, but most emerging and developing countries will need years to rebound.
- Georgieva said the global recovery remains “hobbled” by the pandemic and its impact, likening the recovery to walking with stones in shoes.
- Growth is expected to be driven by the United States and China, with increased momentum seen in Italy and Europe. Growth is declining elsewhere.
- Inflation remains a risk and will continue to be so for emerging and developing countries but will likely subside in most countries next year.
- Global debt levels are estimated at 100% of world gross domestic product, but restructuring efforts should be concluded successfully.