IMF: Global Growth is Slowing, Inflation is Rising
Covid-19's Omicron variant is creating obstacles to the global economy that will slow growth this year, especially the world's two largest economies, the IMF said.
The Washington-based crisis creditor has lowered its global GDP forecast for 2022 to 4.4%, half a point less than the October estimate, due to "obstacles" caused by the latest epidemic, although they are expected to begin to subside in the second quarter of the year.
"The global economy is entering a weaker position in 2022 than previously expected," the IMF said in a quarterly update of its World Economic Outlook, adding that the emergence of the Omicron option in late November threatens to reverse this uncertain path to recovery.
At the same time, "rising energy prices and supply disruptions have led to higher-than-expected inflation", which is expected to last longer than expected.
After a solid recovery last year, when the world economy grew by approximately 5.9%, the IMF cut forecasts for almost all countries - with the notable exception of India - but was most affected by lower forecasts for the United States and China.
"These barriers are expected to weigh on growth in the first quarter of 2022," the report said. "The negative impact is expected to weaken from the second quarter, assuming that the global jump in Omicron infections decreases and the virus does not mutate into new variants that require further mobility restrictions."
The International Monetary Fund reiterated that controlling the pandemic is crucial for economic prospects, and called for widespread vaccination in developing countries, which are failing to do so, even as developed economies move to boost injections among their already highly...