As of: 01/25/2022 4:14 p.m
Supply chain problems, high inflation and the consequences of the Omicron wave are stubbornly slowing down the economic recovery. The International Monetary Fund has now lowered its forecast for global economic growth this year.
Even if the direct effects of the Omikron wave are still limited, the consequences of the Corona crisis, such as fragile supply chains, high inflation and record debts, continue to weigh on the global economy and dampen its recovery. Against this background, the International Monetary Fund (IMF) has now corrected its economic forecast downwards. The global economy will grow by an estimated 4.4 percent in 2022. That is 0.5 percentage points less than assumed in October.
USA and China bring less thrust
For the United States, the world’s largest economy, the Washington-based organization has cut its growth forecast by 1.2 percentage points to 4.0 percent. The IMF cites the failure of a multi-trillion government investment package in the US Congress as the main reason for this. For China, the second largest economy, the forecast was lowered by 0.8 percentage points to 4.8 percent. The IMF cites the problems in the real estate sector, corona requirements and a reduced desire to buy by consumers as the reason for this.
The IMF lowered the forecast for growth in gross domestic product (GDP) in Germany this year to 3.8 percent, 0.8 percentage points less than last forecast.
Inflation forecast increased significantly
Inflation, which has recently skyrocketed due to supply difficulties in many sectors due to high energy prices and supply difficulties, is likely to remain high at least in 2022. The IMF is now assuming an average inflation rate of 3.9 percent for the industrialized countries. This is an increase of 1.6 percentage points compared to October. In developing and emerging countries, the inflation rate is expected to average 5.9 percent in 2022 – an increase of one percentage point.
In principle, the IMF expects the economy to get off to a weak start because of the current omicron wave. However, the situation should gradually improve over the course of the year.