The International Monetary Fund, on Tuesday, slashed its global growth forecast for the calendar year 2022 to 4.4 per cent from 4.9 per cent projected in the previous World economic Report in October.
“The global economy enters 2022 in a weaker position than previously expected. As the new Omicron variant spreads, countries have reimposed mobility restrictions. Rising energy prices and supply disruptions have resulted in higher and more broad-based inflation than anticipated, notably in the United States and many emerging markets and developing economies,” the IMF said in its report on Tuesday.
🆕 The IMF projects the global economy to grow at 4.4% in 2022, and to slow to 3.8% in 2023, reflecting the multiple challenges the continuing global recovery faces. More in the updated World Economic Outlook. https://t.co/XIAa9fVOTt #WEO pic.twitter.com/0p5U8o8PF9
— IMF (@IMFNews) January 25, 2022
“Global growth is expected to slow to 3.8 per cent in 2023. Although this is 0.2 percentage point higher than in the previous forecast, the upgrade largely reflects a mechanical pickup after current drags on growth dissipate in the second half of 2022,” the IMF said.
According to IMF, inflation is expected to persist due to the ongoing supply chain disruptions and high energy prices continuing in 2022.
“The emergence of new COVID-19 variants could prolong the pandemic and induce renewed economic disruptions. Moreover, supply chain disruptions, energy price volatility, and localized wage pressures mean uncertainty around inflation and policy paths is high,” it said.
