The global growth forecast has been lowered by the International Monetary Fund due to rising Covid-19 cases and supply chain disruptions.
In its delayed World Economic Outlook report, published Tuesday, the International Monetary Fund said it expects global gross domestic product to weaken from 5.9% in 2021, to 4.4% in 2022, with this year's figure being half a percentage point lower than previously estimated.
The report highlighted the emergence of the omicron Covid variant and subsequent market volatility, as well as the weaker position of the global economy.
The world's two largest economies, the U.S. and China, are the main drivers of the revised outlook.
The US economy is expected to grow at a slower rate in the next few years as the Federal Reserve withdraws monetary stimuli. President Biden's signature fiscal policy package was removed from the baseline projection after failure to pass the original bill.
China is predicted to grow 4.8% this year, down from earlier estimates due to disruptions caused by its zero- Covid policy and financial stress among its property developers.
In Brazil, Canada and Mexico, growth estimates were affected by rising inflation and higher energy prices.
Higher inflation is set to persist for longer than previously anticipated, but the International Monetary Fund said it should ease later this year.
The report upgraded its forecast by 0.2 percentage points. The estimate precluded the emergence of a new Covid variant, and any pickup would be dependent on equitable global access to vaccines and health care.
The forecast is dependent on adverse health outcomes declining to low levels in most countries by the end of the decade, if vaccination rates improve worldwide and therapies become more effective.
The emphasis on an effective global health strategy is more important than ever.
All Rights Reserved © 2024
