IMF Slashes Global Economic Growth Forecast

Source: Reuters

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.