IMF Forecasts Slight Drop In Global Growth Due To Pandemic

The International Monetary Fund (IMF) is slightly downgrading its outlook for the global recovery from the pandemic recession, reflecting the persistence of supply chain disruptions in industrialized countries and deadly disparities in vaccination rates between rich and poor nations, Martin Crutsinger reported for the Associated Press (AP).

Photo Insert: The IMF foresees global growth this year of 5.9%, compared with its projection in July of 6%.

In its latest World Economic Outlook being released Tuesday (Wednesday, Oct. 13, 2021, in Manila), the IMF foresees global growth this year of 5.9%, compared with its projection in July of 6%.

“The global recovery continues but the momentum is hobbled by the pandemic,” IMF Chief Economist Gita Gopinath told reporters at a briefing.

For the United States, the world’s largest economy, the IMF predicts growth of 6% for 2021, below its July forecast of 7%. The downward revision reflects a slowdown in economic activity resulting from a rise in COVID-19 cases and delayed production caused by supply shortages and the resulting acceleration of inflation.

IMF predicts that for the world’s advanced economies as a whole, growth will amount to 5.2% this year, compared with a meager predicted gain of 3% for low-income developing countries.

“The dangerous divergence in economic prospects across countries,” the IMF said, “remains a major concern.”

The monetary fund expects the total output from advanced economies to recoup the losses they suffered during the pandemic by 2022 and to exceed their pre-pandemic growth path by 2024.

But in emerging and developing countries outside of China, the IMF warns, output will remain an estimated 5.5% below the output growth path that the IMF had been forecasting before the pandemic struck in March of last year. That downgrade poses a serious threat to living standards in those countries, the fund said.

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