IMF cuts its global growth forecast, citing supply disruptions and the pandemic

A man walks past a poster from the annual World Bank Group/International Monetary Fund meetings, October 11, 2021 in Washington DC.
Although the International Monetary Fund is less optimistic about the future of the global economy in 2021, it still expects moderate growth over the medium-term.

The Fund published Tuesday's World Economic Outlook. It stated that it expects the global gross domestic product (GDP) to grow by 5.9% in 2015, 0.1 percentage points less than its July estimate. The IMF's global growth projection for next year has been kept at 4.9%.

This year's revised outlook is due to supply chain problems in advanced economies as well as a worsening situation in emerging nations.

Gita Gopinath (chief economist at IMF), stated in a blog post that "this modest headline revision masks significant downgrades for certain countries."

"The worsening pandemic dynamics has made the outlook for low-income developing countries more bleak. This downgrade is also due to more difficult near-term prospects of the advanced economy group in part because of supply disruptions.

The United States is in this situation. The IMF reduced its growth estimates for the nation by 1 percentage point, to 6%. Canada's growth outlook was also reduced by 0.6 percentage point, while Spain's and Germany's were cut by 0.5 percentage point each.

The IMF predicts that global growth will be moderate beyond 2022.